UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________________

FORM 10-Q

___________________________________________

(Mark One)


☒			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended ~~March 31,~~September 30, 2023


☐			Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the transition period from to

Commission File No. 0-22818

___________________________________________

THE HAIN CELESTIAL GROUP, INC.

(Exact name of registrant as specified in its charter)

___________________________________________


Delaware						22-3240619
(State or other jurisdiction of incorporation)						(I.R.S. Employer Identification No.)

~~4600 Sleepytime Drive, Boulder, CO 80301~~221 River Street, Hoboken, NJ 07030

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (516) 587-5000

~~1111 Marcus Avenue, Lake Success, NY 11042~~4600 Sleepytime Drive, Boulder, CO 80301

(Former name, former address and former fiscal year, if changed since last report)

___________________________________________

Table of Contents

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.01 per share	HAIN	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

Non-accelerated filer

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ý

As oof October 31, 2023,~~f May 3, 2023,~~ there were ~~89,443,996~~89,709,018 shares outstanding of the registrant’s Common Stock, par value $.01 per share.

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THE HAIN CELESTIAL GROUP, INC.

Index


	Part I - Financial Information	Page

Item 1.	Financial Statements
	Consolidated Balance Sheets - ~~March~~ ~~31, 202~~3 September 30, 2023 and June 30, ~~2022~~2023	3
	Consolidated Statements of Operations - Three ~~and nine~~ months ended ~~March 31,~~September 30, 2023 and 2022	4
	Consolidated Statements of Comprehensive ~~(Loss)~~ ~~Income~~Loss - Three ~~and nine~~ months ended ~~March 31,~~September 30, 2023 and 2022	5
	Consolidated Statement of Stockholders’ Equity - Three ~~and nine~~ months ended ~~March 31,~~September 30, 2023 and 2022	6
	Consolidated Statements of Cash Flows - ~~Nine~~Three months ended ~~March 31,~~September 30, 2023 and 2022	8
	Notes to Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3530
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5139
Item 4.	Controls and Procedures	5240

	Part II - Other Information

Items 3, and 4 are not ~~applicable.~~applicable
Item 1.	Legal Proceedings	5341
Item 1A.	Risk Factors	5341
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5341
Item 5.	Other Information	5547
Item 6.	Exhibits	5542
Signatures		5643

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Forward-Looking Statements

This Quarterly Report on Form 10-Q for the quarter ended ~~March 31,~~September 30, 2023 (the “Form 10-Q”) contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the results of The Hain Celestial Group, Inc. (collectively with its subsidiaries, the “Company,” “Hain Celestial,” “we,” “us” or “our”) may differ materially from those expressed or implied by such forward-looking statements. The words “believe,” “expect,” “anticipate,” “may,” “should,” “plan,” “intend,” “potential,” “will” and similar expressions are intended to identify such forward-looking statements. Forward-looking statements include, among other ~~things,~~things: our beliefs or expectations relating to our future performance, results of operations and financial condition; ~~foreign exchange and inflation rates;~~ our strategic initiatives (including statements related to Hain Reimagined and our related investments in our business); our business ~~strategy,~~strategy; our supply chain, including the availability and pricing of raw ~~materials,~~materials; our brand ~~portfolio,~~portfolio; pricing actions and product performance; inflation rates; and current or future macroeconomic ~~trends; and future corporate acquisitions or dispositions.~~trends.

Risks and uncertainties that may cause actual results to differ materially from forward-looking statements include: challenges and uncertainty resulting from the impact of competition; our ability to manage our supply chain effectively; input cost inflation, including with respect to freight and other distribution costs; ~~foreign currency exchange risk; risks arising from the Russia-Ukraine war;~~ disruption of operations at our manufacturing facilities; reliance on independent contract manufacturers; changes to consumer preferences; customer concentration; reliance on independent distributors; ~~the availability of natural and organic ingredients;~~ risks associated with operating internationally; pending and future litigation, including litigation relating to Earth’s Best® baby food products; the reputation of our Company and our brands; compliance with our credit agreement; foreign currency exchange risk; the availability of organic ingredients; risks associated with outsourcing arrangements; our ability to execute our cost reduction initiatives and related strategic initiatives; risks associated with conflicts in Eastern Europe and the Middle East and other geopolitical events; our ability to identify and complete acquisitions or divestitures and our level of success in integrating acquisitions; our reliance on independent certification for a number of our products; ~~the reputation of our Company and our brands;~~ our ability to use and protect trademarks; general economic conditions; ~~the United Kingdom’s exit from the European Union;~~ cybersecurity incidents; disruptions to information technology systems; changing rules, public disclosure regulations and stakeholder expectations on ESG-related matters; the impact of climate change; liabilities, claims or regulatory change with respect to environmental matters; potential liability if our products cause illness or physical harm; the highly regulated environment in which we operate; compliance with data privacy laws; ~~compliance with our credit agreement;~~ our ability to issue preferred stock; the adequacy of our insurance coverage; impairments in the carrying value of goodwill or other intangible assets; and other risks and matters described in our most recent Annual Report on Form 10-K, this Form 10-Q and other reports that we file in the future.

We undertake no obligation to update forward-looking statements to reflect actual results or changes in assumptions or circumstances, except as required by applicable law.

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

~~MARCH 31,~~SEPTEMBER 30, 2023 AND JUNE 30, ~~2022~~2023

(In thousands, except par values)


		March 31,		June 30,			September 30,		June 30,
		2023		2022			2023		2023
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	43,682	$	65,512	Cash and cash equivalents	$	38,280	$	53,364
Accounts receivable, less allowance for doubtful accounts of $3,229 and $1,731, respectively		179,114		170,661
Accounts receivable, less allowance for doubtful accounts of $3,018 and $2,750, respectively						Accounts receivable, less allowance for doubtful accounts of $3,018 and $2,750, respectively	158,094		160,948
Inventories	Inventories	316,345		308,034		Inventories	313,335		310,341
Prepaid expenses and other current assets	Prepaid expenses and other current assets	58,719		54,079		Prepaid expenses and other current assets	56,044		66,378
Assets held for sale		1,250		1,840

Total current assets	Total current assets	599,110		600,126		Total current assets	565,753		591,031
Property, plant and equipment, net	Property, plant and equipment, net	296,433		297,405		Property, plant and equipment, net	285,972		296,325
Goodwill	Goodwill	931,729		933,796		Goodwill	928,375		938,640
Trademarks and other intangible assets, net	Trademarks and other intangible assets, net	314,536		477,533		Trademarks and other intangible assets, net	290,867		298,105
Investments and joint ventures	Investments and joint ventures	12,720		14,456		Investments and joint ventures	12,298		12,798
Operating lease right-of-use assets, net	Operating lease right-of-use assets, net	98,306		114,691		Operating lease right-of-use assets, net	102,540		95,894
Other assets	Other assets	19,990		20,377		Other assets	31,091		25,846

Total assets	Total assets	$	2,272,824	$	2,458,384	Total assets	$	2,216,896	$	2,258,639
LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY					LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	146,340	$	174,765	Accounts payable	$	142,291	$	134,780
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	95,841		86,833		Accrued expenses and other current liabilities	96,731		88,520
Current portion of long-term debt	Current portion of long-term debt	7,575		7,705		Current portion of long-term debt	7,568		7,567

Total current liabilities	Total current liabilities	249,756		269,303		Total current liabilities	246,590		230,867
Long-term debt, less current portion	Long-term debt, less current portion	848,982		880,938		Long-term debt, less current portion	807,401		821,181
Deferred income taxes	Deferred income taxes	51,155		95,044		Deferred income taxes	61,006		72,086
Operating lease liabilities, noncurrent portion	Operating lease liabilities, noncurrent portion	91,885		107,481		Operating lease liabilities, noncurrent portion	97,165		90,014
Other noncurrent liabilities	Other noncurrent liabilities	24,571		22,450		Other noncurrent liabilities	23,740		26,584

Total liabilities	Total liabilities	1,266,349		1,375,216		Total liabilities	1,235,902		1,240,732
Commitments and contingencies (Note 16)	Commitments and contingencies (Note 16)					Commitments and contingencies (Note 16)
Stockholders’ equity:	Stockholders’ equity:					Stockholders’ equity:
Preferred stock - $.01 par value, authorized 5,000 shares; issued and outstanding: none	Preferred stock - $.01 par value, authorized 5,000 shares; issued and outstanding: none	—		—		Preferred stock - $.01 par value, authorized 5,000 shares; issued and outstanding: none	—		—
Common stock - $.01 par value, authorized 150,000 shares; issued: 111,263 and 111,090 shares, respectively; outstanding: 89,423 and 89,302 shares, respectively		1,113		1,111
Common stock - $.01 par value, authorized 150,000 shares; issued: 111,578 and 111,339 shares, respectively; outstanding: 89,628 and 89,475 shares, respectively						Common stock - $.01 par value, authorized 150,000 shares; issued: 111,578 and 111,339 shares, respectively; outstanding: 89,628 and 89,475 shares, respectively	1,116		1,113
Additional paid-in capital	Additional paid-in capital	1,213,783		1,203,126		Additional paid-in capital	1,221,291		1,217,549
Retained earnings	Retained earnings	671,260		769,098		Retained earnings	642,185		652,561
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(152,945)		(164,482)		Accumulated other comprehensive loss	(155,623)		(126,216)
		1,733,211		1,808,853			1,708,969		1,745,007
Less: Treasury stock, at cost, 21,840 and 21,788 shares, respectively		(726,736)		(725,685)
Less: Treasury stock, at cost, 21,950 and 21,864 shares, respectively						Less: Treasury stock, at cost, 21,950 and 21,864 shares, respectively	(727,975)		(727,100)
Total stockholders’ equity	Total stockholders’ equity	1,006,475		1,083,168		Total stockholders’ equity	980,994		1,017,907
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	2,272,824	$	2,458,384	Total liabilities and stockholders’ equity	$	2,216,896	$	2,258,639

See notes to consolidated financial statements.

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THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~MARCH 31,~~SEPTEMBER 30, 2023 AND 2022

(In thousands, except per share amounts)


		Three Months Ended March 31,				Nine Months Ended March 31,					Three Months Ended September 30,
		2023		2022		2023		2022			2023		2022
Net sales	Net sales	$	455,243	$	502,939	$	1,348,802	$	1,434,783	Net sales	$	425,029	$	439,351
Cost of sales	Cost of sales	357,764		387,236		1,053,131		1,096,367		Cost of sales	341,086		345,016
Gross profit	Gross profit	97,479		115,703		295,671		338,416		Gross profit	83,943		94,335
Selling, general and administrative expenses	Selling, general and administrative expenses	75,047		75,750		222,355		229,679		Selling, general and administrative expenses	77,169		74,951
Intangibles and long-lived asset impairment		156,583		—		156,923		303

Productivity and transformation costs										Productivity and transformation costs	6,403		773
Amortization of acquired intangible assets	Amortization of acquired intangible assets	2,842		3,110		8,415		7,254		Amortization of acquired intangible assets	1,955		2,788
Productivity and transformation costs		3,933		1,679		5,692		8,448

Long-lived asset impairment										Long-lived asset impairment	694		—
Operating (loss) income	Operating (loss) income	(140,926)		35,164		(97,714)		92,732		Operating (loss) income	(2,278)		15,823
Interest and other financing expense, net	Interest and other financing expense, net	13,421		3,224		31,910		7,672		Interest and other financing expense, net	13,244		7,677
Other expense (income), net		439		(712)		(2,413)		(10,570)
(Loss) income before income taxes and equity in net loss of equity-method investees		(154,786)		32,652		(127,211)		95,630
Other income, net										Other income, net	(265)		(1,790)
(Loss) income from operations before income taxes and equity in net loss of equity-method investees										(Loss) income from operations before income taxes and equity in net loss of equity-method investees	(15,257)		9,936
(Benefit) provision for income taxes	(Benefit) provision for income taxes	(39,587)		7,738		(30,599)		19,425		(Benefit) provision for income taxes	(5,379)		2,631
Equity in net loss of equity-method investees	Equity in net loss of equity-method investees	528		383		1,226		1,374		Equity in net loss of equity-method investees	498		382

Net (loss) income	Net (loss) income	$	(115,727)	$	24,531	$	(97,838)	$	74,831	Net (loss) income	$	(10,376)	$	6,923

Net (loss) income per common share:	Net (loss) income per common share:									Net (loss) income per common share:

Basic	Basic	$	(1.29)	$	0.27	$	(1.09)	$	0.80	Basic	$	(0.12)	$	0.08

Diluted	Diluted	$	(1.29)	$	0.27	$	(1.09)	$	0.79	Diluted	$	(0.12)	$	0.08

Shares used in the calculation of net (loss) income per common share:	Shares used in the calculation of net (loss) income per common share:									Shares used in the calculation of net (loss) income per common share:
Basic	Basic	89,421		91,139		89,369		94,099		Basic	89,512		89,307
Diluted	Diluted	89,421		91,310		89,369		94,519		Diluted	89,512		89,493

See notes to consolidated financial statements.

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THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~(LOSS) INCOME~~LOSS (UNAUDITED)

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~MARCH 31,~~SEPTEMBER 30, 2023 AND 2022

(In thousands)
Three Months Ended
March 31, 2023 March 31, 2022
Pretax
amount Tax (expense) benefit After-tax amount Pretax
amount Tax (expense) benefit After-tax amount
Net (loss) income $ (115,727) $ 24,531
Other comprehensive income (loss):
Foreign currency translation adjustments before reclassifications $ 15,250 $ — 15,250 $ (18,701) $ — (18,701)
Change in deferred (losses) gains on cash flow hedging instruments (6,031) 1,521 (4,510) 1,841 (387) 1,454
Change in deferred gains on fair value hedging instruments 172 (43) 129 — — —
Change in deferred (losses) gains on net investment hedging instruments (628) 160 (468) 1,426 (299) 1,127
Total other comprehensive income (loss) $ 8,763 $ 1,638 $ 10,401 $ (15,434) $ (686) $ (16,120)
Total comprehensive (loss) income $ (105,326) $ 8,411
Nine Months Ended
March 31, 2023 March 31, 2022
Pretax
amount Tax (expense) benefit After-tax amount Pretax
amount Tax (expense) benefit After-tax amount
Net (loss) income $ (97,838) $ 74,831
Other comprehensive income (loss):
Foreign currency translation adjustments before reclassifications $ 7,774 $ — 7,774 $ (43,649) $ — (43,649)
Change in deferred gains on cash flow hedging instruments 5,724 (1,506) 4,218 2,567 (540) 2,027
Change in deferred gains on fair value hedging instruments 591 (145) 446 — — —
Change in deferred (losses) gains on net investment hedging instruments (1,139) 238 (901) 5,423 (1,140) 4,283
Total other comprehensive income (loss) $ 12,950 $ (1,413) $ 11,537 $ (35,659) $ (1,680) $ (37,339)
Total comprehensive (loss) income $ (86,301) $ 37,492


	Three Months Ended
	September 30, 2023						September 30, 2022
	Pretax amount		Tax (expense) benefit		After tax amount		Pretax amount		Tax (expense) benefit		After tax amount
Net (loss) income					$	(10,376)					$	6,923

Other comprehensive loss:
Foreign currency translation adjustments before reclassifications	(32,933)		—		(32,933)		(67,149)		—		(67,149)

Change in deferred gains on cash flow hedging instruments	3,238		(794)		2,444		14,231		(3,638)		10,593
Change in deferred losses on fair value hedging instruments	(381)		94		(287)		(272)		69		(203)
Change in deferred gains on net investment hedging instruments	1,821		(452)		1,369		5,773		(1,476)		4,297

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

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

See notes to consolidated financial statements.

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THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED)

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~MARCH 31,~~SEPTEMBER 30, 2023

(In thousands, except par values)


		Common Stock			Additional							Accumulated Other					Common Stock			Additional							Accumulated Other
			Amount		Paid-in		Retained		Treasury Stock			Comprehensive						Amount		Paid-in		Retained		Treasury Stock			Comprehensive
		Shares	at $.01		Capital		Earnings		Shares	Amount		Loss		Total			Shares	at $.01		Capital		Earnings		Shares	Amount		Loss		Total
Balance at June 30, 2022		111,090	$	1,111	$	1,203,126	$	769,098	21,788	$	(725,685)	$	(164,482)	$	1,083,168
Net income							6,923							6,923
Balance at June 30, 2023																Balance at June 30, 2023	111,339	$	1,113	$	1,217,549	$	652,561	21,864	$	(727,100)	$	(126,216)	$	1,017,907
Net loss																Net loss						(10,376)							(10,376)

Other comprehensive loss	Other comprehensive loss											(52,462)		(52,462)		Other comprehensive loss											(29,407)		(29,407)
Issuance of common stock pursuant to stock-based compensation plans	Issuance of common stock pursuant to stock-based compensation plans	24	1											1		Issuance of common stock pursuant to stock-based compensation plans	239	3											3

Employee shares withheld for taxes	Employee shares withheld for taxes								10	(229)				(229)		Employee shares withheld for taxes								86	(875)				(875)

Stock-based compensation expense	Stock-based compensation expense				3,994									3,994		Stock-based compensation expense				3,742									3,742
Balance at September 30, 2022		111,114	$	1,112	$	1,207,120	$	776,021	21,798	$	(725,914)	$	(216,944)	$	1,041,395
Net income							10,966							10,966

Other comprehensive income												53,598		53,598
Issuance of common stock pursuant to stock-based compensation plans		142	1											1

Employee shares withheld for taxes									39	(754)				(754)

Stock-based compensation expense					3,435									3,435
Balance at December 31, 2022		111,256	$	1,113	$	1,210,555	$	786,987	21,837	$	(726,668)	$	(163,346)	$	1,108,641
Net loss							(115,727)							(115,727)

Other comprehensive income												10,401		10,401
Issuance of common stock pursuant to stock-based compensation plans		7												—

Employee shares withheld for taxes									3	(68)				(68)

Stock-based compensation expense					3,228									3,228
Balance at March 31, 2023		111,263	$	1,113	$	1,213,783	$	671,260	21,840	$	(726,736)	$	(152,945)	$	1,006,475
Balance at September 30, 2023																Balance at September 30, 2023	111,578	$	1,116	$	1,221,291	$	642,185	21,950	$	(727,975)	$	(155,623)	$	980,994

See notes to consolidated financial statements.

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THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED)

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~MARCH 31,~~SEPTEMBER 30, 2022

(In thousands, except par values)


		Common Stock			Additional							Accumulated Other					Common Stock			Additional							Accumulated Other
			Amount		Paid-in		Retained		Treasury Stock			Comprehensive						Amount		Paid-in		Retained		Treasury Stock			Comprehensive
		Shares	at $.01		Capital		Earnings		Shares	Amount		Loss		Total			Shares	at $.01		Capital		Earnings		Shares	Amount		Loss		Total
Balance at June 30, 2021		109,507	$	1,096	$	1,187,530	$	691,225	10,438	$	(283,957)	$	(73,011)	$	1,522,883
Balance at June 30, 2022																Balance at June 30, 2022	111,090	$	1,111	$	1,203,126	$	769,098	21,788	$	(725,685)	$	(164,482)	$	1,083,168
Net income	Net income						19,411							19,411		Net income						6,923							6,923

Other comprehensive loss	Other comprehensive loss											(20,963)		(20,963)		Other comprehensive loss											(52,462)		(52,462)
Issuance of common stock pursuant to stock-based compensation plans	Issuance of common stock pursuant to stock-based compensation plans	61	—		—									—		Issuance of common stock pursuant to stock-based compensation plans	24	1											1

Employee shares withheld for taxes	Employee shares withheld for taxes								29	(1,175)				(1,175)		Employee shares withheld for taxes								10	(229)				(229)
Repurchase of common stock									4,525	(175,687)				(175,687)

Stock-based compensation expense	Stock-based compensation expense				4,287									4,287		Stock-based compensation expense				3,994									3,994
Balance at September 30, 2021		109,568	$	1,096	$	1,191,817	$	710,636	14,992	$	(460,819)	$	(93,974)	$	1,348,756
Net income							30,889							30,889

Other comprehensive loss												(256)		(256)
Issuance of common stock pursuant to stock-based compensation plans		1,436	14		(14)									—

Employee shares withheld for taxes									654	(29,858)				(29,858)
Repurchase of common stock									2,027	(89,831)				(89,831)
Stock-based compensation expense					4,156									4,156
Balance at December 31, 2021		111,004	$	1,110	$	1,195,959	$	741,525	17,673	$	(580,508)	$	(94,230)	$	1,263,856
Net income							24,531							24,531
Other comprehensive loss												(16,120)		(16,120)
Issuance of common stock pursuant to stock-based compensation plans		83	1		(1)									—
Employee shares withheld for taxes									40	(1,597)				(1,597)
Repurchase of common stock									3,574	(130,472)				(130,472)
Stock-based compensation expense					3,846									3,846
Balance at March 31, 2022		111,087	$	1,111	$	1,199,804	$	766,056	21,287	$	(712,577)	$	(110,350)	$	1,144,044

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

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 ~~NINE~~THREE MONTHS ENDED ~~MARCH 31,~~SEPTEMBER 30, 2023 AND 2022

(In thousands)


		Nine Months Ended March 31,					Three Months Ended September 30,
		2023		2022			2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES	CASH FLOWS FROM OPERATING ACTIVITIES					CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income		$	(97,838)	$	74,831

Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Net (loss) income						Net (loss) income	$	(10,376)	$	6,923
Adjustments to reconcile net (loss) income from operations to net cash provided by (used in) operating activities:						Adjustments to reconcile net (loss) income from operations to net cash provided by (used in) operating activities:
Depreciation and amortization	Depreciation and amortization	37,909		34,396		Depreciation and amortization	12,305		11,970
Deferred income taxes	Deferred income taxes	(44,809)		7,374		Deferred income taxes	(11,269)		(1,497)

Equity in net loss of equity-method investees	Equity in net loss of equity-method investees	1,226		1,374		Equity in net loss of equity-method investees	498		382
Stock-based compensation, net	Stock-based compensation, net	10,657		12,289		Stock-based compensation, net	3,742		3,994

Intangibles and long-lived asset impairment		156,923		303
Gain on sale of assets		(3,529)		(8,869)
Long-lived asset impairment						Long-lived asset impairment	694		—
Loss (gain) on sale of assets						Loss (gain) on sale of assets	62		(60)

Other non-cash items, net	Other non-cash items, net	(1,526)		(2,155)		Other non-cash items, net	(556)		(1,457)
(Decrease) increase in cash attributable to changes in operating assets and liabilities:	(Decrease) increase in cash attributable to changes in operating assets and liabilities:					(Decrease) increase in cash attributable to changes in operating assets and liabilities:
Accounts receivable	Accounts receivable	(7,926)		14,150		Accounts receivable	(1,150)		(9,589)
Inventories	Inventories	(8,534)		(4,371)		Inventories	(7,423)		(16,907)
Other current assets	Other current assets	455		(10,996)		Other current assets	8,761		2,541
Other assets and liabilities	Other assets and liabilities	3,496		(2,705)		Other assets and liabilities	(3,198)		1,348
Accounts payable and accrued expenses	Accounts payable and accrued expenses	(20,195)		(16,435)		Accounts payable and accrued expenses	21,940		(2,764)
Net cash provided by operating activities		26,309		99,186
Net cash provided by (used in) operating activities						Net cash provided by (used in) operating activities	14,030		(5,116)
CASH FLOWS FROM INVESTING ACTIVITIES	CASH FLOWS FROM INVESTING ACTIVITIES					CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment	Purchases of property, plant and equipment	(21,434)		(33,939)		Purchases of property, plant and equipment	(6,906)		(7,215)
Acquisitions of businesses, net of cash acquired		—		(260,474)

Investments and joint ventures, net	Investments and joint ventures, net	433		(614)		Investments and joint ventures, net	—		191
Proceeds from sale of assets	Proceeds from sale of assets	7,758		10,756		Proceeds from sale of assets	1,257		96

Net cash used in investing activities	Net cash used in investing activities	(13,243)		(284,271)		Net cash used in investing activities	(5,649)		(6,928)
CASH FLOWS FROM FINANCING ACTIVITIES	CASH FLOWS FROM FINANCING ACTIVITIES					CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings under bank revolving credit facility	Borrowings under bank revolving credit facility	275,000		678,000		Borrowings under bank revolving credit facility	46,000		80,000
Repayments under bank revolving credit facility	Repayments under bank revolving credit facility	(301,000)		(370,000)		Repayments under bank revolving credit facility	(57,000)		(68,000)
Borrowings under term loan		—		300,000

Repayments under term loan	Repayments under term loan	(5,625)		(1,875)		Repayments under term loan	(1,875)		(1,875)

Payments of other debt, net	Payments of other debt, net	(2,116)		(3,232)		Payments of other debt, net	(3,834)		(72)
Share repurchases		—		(397,405)

Employee shares withheld for taxes	Employee shares withheld for taxes	(1,051)		(32,630)		Employee shares withheld for taxes	(875)		(229)
Net cash (used in) provided by financing activities	Net cash (used in) provided by financing activities	(34,792)		172,858		Net cash (used in) provided by financing activities	(17,584)		9,824
Effect of exchange rate changes on cash	Effect of exchange rate changes on cash	(104)		(5,836)		Effect of exchange rate changes on cash	(5,881)		(11,498)

Net decrease in cash and cash equivalents	Net decrease in cash and cash equivalents	(21,830)		(18,063)		Net decrease in cash and cash equivalents	(15,084)		(13,718)
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	65,512		75,871		Cash and cash equivalents at beginning of period	53,364		65,512
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	43,682	$	57,808	Cash and cash equivalents at end of period	$	38,280	$	51,794

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 and is headquartered in ~~Boulder, Colorado.~~Hoboken, New Jersey. The Company’s mission has continued to evolve since its founding, with health and wellness being the core tenet. The Company continues to be a leading marketer, manufacturer, and seller of organic and natural, “better-for-you” products by anticipating and exceeding consumer expectations in providing quality, innovation, value and convenience. The Company is committed to growing sustainably while continuing to implement environmentally sound business practices and manufacturing processes. Hain Celestial sells its products through specialty and natural food distributors, supermarkets, natural food stores, mass-market and e-commerce retailers, food service channels and club, drug, and convenience stores worldwide. The Company operates under two reportable segments: North America and International.

2. BASIS OF PRESENTATION

The Company’s unaudited consolidated financial statements include the accounts of the Company and its ~~wholly owned~~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.~~accounting. As such, consolidated net ~~(loss) income~~loss includes ~~the~~the Company's equity in the current earnings or losses of such companies.

The Company's unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP and should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended June 30, ~~2022~~2023 (the “Form 10-K”). The amounts as of and for the periods ended June 30, ~~2022~~2023 are derived from the Company’s audited annual financial statements. The unaudited consolidated financial statements reflect all normal recurring adjustments which, in management’s opinion, are necessary for a fair presentation for interim periods. Operating results for ~~interim periods~~the three months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the ~~full year.~~fiscal year ending June 30, 2024. Please refer to the Notes to the Consolidated Financial Statements as of June 30, ~~2022~~2023 and for the fiscal year then ended included in the Form 10-K for information not included in these condensed notes.

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

~~Reclassifications~~

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

Significant Accounting Policies

The Company's significant accounting policies are described in Note 2, Summary of Significant Accounting Policies and Practices, in the Notes to the Consolidated Financial Statements in the Form 10-K. Included herein are certain updates to those policies.

Transfer of Financial Assets

The Company accounts for transfers of financial assets, such as non-recourse accounts receivable financing arrangements, when the Company has surrendered control over the related assets. Determining whether control has transferred requires an evaluation of relevant legal considerations, an assessment of the nature and extent of the Company’s continuing involvement with the assets transferred and any other relevant considerations. The Company has non-recourse financing arrangements in which eligible receivables are sold to third-party buyers in exchange for cash. The Company transferred accounts receivable in their entirety to the buyers and satisfied all of the conditions to re~~port~~report the transfer of financial assets in their entirety as a sale. The principal amount of receivables sold under these arrangements wwas $86,506 and $83,659 during~~as $290,856 and $112,607 during~~ the ~~nine~~three months ended ~~March 31,~~September 30, 2023 and 2022, respectively. The incremental cost of financing receivables under these arrangements is included in selling, general and administrative expenses on the Company’s Consolidated Statements of Operations. The proceeds from the sale of receivables are included in cash ~~used in~~provided by operating activities on the Consolidated Statements of Cash Flows.

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Recently ~~Issued and~~ Adopted Accounting Pronouncements

In ~~March~~July 2023, the Financial Accounting Standards Board ~~("FASB"~~(“FASB”) issued Accounting Standards Update (“ASU”) ~~2023-02, Investments —~~2023-03, “Presentation of Financial Statement (Topic 205), Income Statement - Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity ~~Method~~(Topic 480), Equity (Topic 505), and ~~Joint Ventures~~Compensation - Stock Compensation (Topic ~~323):~~718)”, to amend various SEC paragraphs in the Accounting ~~for Investments in Tax Credit Structures Using~~Standards Codification to reflect the ~~Proportional Amortization Method~~issuance of SEC Staff Accounting Bulletin No. 120, among other things. The Company adopted this conforming guidance upon issuance, which would allow reporting entities to consistently account for equity investments made primarily for the purpose of receiving income tax credits and other income tax benefits This ASU is effective for fiscal years beginning after December 15, 2023. This standard will not have anyhad no material impact on ~~the Company's~~its condensed consolidated financial ~~statements.~~

In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting". The guidance allows for companies to: (1) account for certain contract modifications as a continuation of the existing contract without additional analysis; (2) continue hedge accounting when certain critical terms of a hedging relationship changestatements and assess effectiveness in ways that disregard certain potential sources of ineffectiveness; and (3) make a one-time sale and/or transfer of certain debt securities from held-to-maturity to available-for-sale or trading. This ASU was adopted by the Company and applies prospectively to contract modifications and hedging relationships. ASU 2020-04 is currently effective and may be applied prospectively to contract modifications made on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends certain provisions of Topic 848 to December 31, 2024.

ASU 2020-04 allows for different elections to be made at different points in time and the timing of those elections will be documented as applicable. For the avoidance of doubt, the Company intends to reassess its elections of optional expedients and exceptions included within ASU 2020-04 related ~~to its hedging activities and will document the election of these items on a quarterly basis or when changes/additions are necessary.~~

disclosures.

During fiscal year 2023, the Company adopted hedge accounting expedients related to probability of forecasted transactions to assert probability of the hedged interest (payments/receipts) regardless of any expected modification in terms related to reference rate reform. The Company has also adopted the Secured Overnight Financing Rate (“SOFR”) as the alternative reference rate to replace LIBOR with respect to the Company’s long-term debt. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company is continuing to assess the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

3. (LOSS) EARNINGS PER SHARE

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


		Three Months Ended March 31,				Nine Months Ended March 31,					Three Months Ended September 30,
		2023		2022		2023		2022			2023		2022
Numerator:	Numerator:									Numerator:

Net (loss) income	Net (loss) income	$	(115,727)	$	24,531	$	(97,838)	$	74,831	Net (loss) income	$	(10,376)	$	6,923

Denominator:	Denominator:									Denominator:
Basic weighted average shares outstanding	Basic weighted average shares outstanding	89,421		91,139		89,369		94,099		Basic weighted average shares outstanding	89,512		89,307
Effect of dilutive stock options, unvested restricted stock and unvested restricted share units(1)		—		171		—		420
Effect of dilutive stock options, unvested restricted stock and unvested restricted share units										Effect of dilutive stock options, unvested restricted stock and unvested restricted share units	—		186
Diluted weighted average shares outstanding	Diluted weighted average shares outstanding	89,421		91,310		89,369		94,519		Diluted weighted average shares outstanding	89,512		89,493

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

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

Due to the incurred net loss in the three months ended September 30, 2023, all common stock equivalents such as stock options and unvested restricted stock awards have been excluded from the computation of diluted net loss per share because the effect would have been anti-dilutive to the computations.

~~(1)Due to a loss from operations, common~~There were 489 restricted stock ~~equivalents are~~awards excluded from the calculation of diluted ~~weighted average shares outstanding for the three and nine months ended March 31, 2023, respectively, as the impact would be anti-dilutive.~~

~~There were 329 and 508 restricted stock awards excluded from our calculation of diluted~~ net ~~(loss)~~ income per share for the three months ended ~~March 31, 2023 and~~September 30, 2022, ~~respectively,~~ as such awards were anti-dilutive. ~~There were 524 and 275 stock-based awards comprised of restricted stock awards and stock options excluded from the calculation of diluted net (loss) income per share~~Additionally, for the ~~nine~~three months ended~~March 31,~~September 30, 2023 and 2022 ~~respectively, as such awards~~there were ~~anti-dilutive.~~

372

~~Additionally, 399~~ and ~~231~~298, stock-based awards outstanding, ~~at March 31, 2023 and 2022, respectively, were excluded from the calculation of diluted net (loss) income per share for the three months ended March 31, 2023 and 2022, respectively, as such awards~~

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

~~Share Repurchase Program~~

In January 2022, the Company's Board of Directors (the "Board") authorized the repurchase of up to $200,000 of the Company’s issued and outstanding common stock. Repurchases may be made from time to time in the open market, pursuant to pre-set trading plans, in private transactions or otherwise. The current authorization does not have a stated expiration date. The extent to which the Company repurchases its shares and the timing of such repurchases will depend upon market conditions and other corporate considerations. During the nine months ended March 31, 2023, the Company did not repurchase any shares under the repurchase program. As of March 31, 2023, the Company had $173,514 of remaining authorization under the share repurchase program. In addition, during the nine months ended March 31, 2022, the Company repurchased 6,552 shares under the repurchase program for a total of $265,420 excluding commissions, at an average price of $40.50 per share. Repurchases made during the nine months ended March 31, 2022, were made under a previous Board authorization.

4. ~~ACQUISITION AND DISPOSITION~~

~~Acquisition~~

~~That's How We Roll~~

~~On December 28, 2021, the Company acquired all outstanding stock of THWR, the producer and marketer of ParmCrisps~~® ~~and Thinsters~~®~~, deepening the Company's position in the~~ ~~snacking category. Consideration for the transaction consisted of cash, net of cash acquired, totaling~~ ~~$260,185. The acquisition was funded with borrowings under the Credit Agreement (as defined in Note 9,~~ ~~Debt and Borrowings~~).

During the three months ended December 31, 2022 the Company finalized the purchase price allocation and recognized a measurement period adjustment of $794 to acquired deferred tax assets, with a related impact to goodwill. Results of THWR are included in the United States operating segment, a component of the North America reportable segment. THWR's net sales included in our consolidated results were 2.2% and 3.08% of consolidated net sales for the three and nine months ended March 31, 2023 respectively.

The following table provides unaudited pro forma results of operations had the acquisition been completed at the beginning of fiscal 2022. The pro forma information reflects certain adjustments related to the acquisition but does not reflect any potential operating efficiencies or cost savings that may result from the acquisition. Accordingly, this information has been provided for illustrative purposes only and does not purport to be indicative of the actual results that would have been achieved by the Company for the periods presented or that will be achieved by the combined company in the future. The pro forma information has been adjusted to give effect to items that are directly attributable to the transactions and are expected to have a continuing impact on the combined results.

Unaudited supplemental pro forma information
Three Months Ended Nine Months Ended
March 31, 2022 March 31, 2022
Net sales $ 502,939 $ 1,488,483
Net income from operations(1)
$ 26,970 $ 81,415
Diluted net (loss) income per common share from operations $ 0.30 $ 0.86

~~(1)~~The pro forma adjustments include the elimination of transaction costs totaling $5,103 from the nine months ended March 31, 2022. Additionally, the pro forma adjustments include the elimination of integration costs and a fair value inventory adjustment totaling $1,500 and $1,800, respectively, for the three and nine months ended March 31, 2022.

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

~~Disposition~~

~~Westbrae Natural~~®

~~On December 15, 2022, the Company completed the divestiture of its Westbrae Natural~~® brand (Westbrae) for total cash consideration of $7,498. The sale of Westbrae is consistent with the Company’s portfolio simplification process. Westbrae operated out of the United States and was part of the Company’s North America reportable segment. During the nine months ended March 31, 2023, the Company deconsolidated the net assets of Westbrae, primarily consisting of $3,054 of goodwill, ~~and~~ ~~recognized a pretax gain on sale of $3,488.~~

5. INVENTORIES

Inventories consisted of the following:

March 31,
2023 June 30,
2022
Finished goods $ 194,858 $ 202,544
Raw materials, work-in-progress and packaging 121,487 105,490
$ 316,345 $ 308,034


	September 30, 2023		June 30, 2023
Finished goods	$	199,043	$	192,007
Raw materials, work-in-progress, and packaging	114,292		118,334
	$	313,335	$	310,341

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6.5. PROPERTY, PLANT AND EQUIPMENT, NET

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


		March 31, 2023		June 30, 2022			September 30, 2023		June 30, 2023
Land	Land	$	11,293	$	11,216	Land	$	11,202	$	11,453
Buildings and improvements	Buildings and improvements	50,818		51,849		Buildings and improvements	53,926		55,354
Machinery and equipment	Machinery and equipment	317,883		296,398		Machinery and equipment	327,790		335,912
Computer hardware and software	Computer hardware and software	65,065		65,680		Computer hardware and software	53,658		54,192
Furniture and fixtures	Furniture and fixtures	19,762		23,522		Furniture and fixtures	20,301		20,722
Leasehold improvements	Leasehold improvements	48,757		54,999		Leasehold improvements	48,834		49,394
Construction in progress	Construction in progress	32,070		27,200		Construction in progress	13,889		10,816
		545,648		530,864			529,600		537,843
Less: Accumulated depreciation and impairment	Less: Accumulated depreciation and impairment	249,215		233,459		Less: Accumulated depreciation and impairment	243,628		241,518
		$	296,433	$	297,405		$	285,972	$	296,325

Depreciation expense for the three months ended ~~March 31,~~September 30, 2023 and 2022 was ~~$9,649~~$9,826 and ~~$8,292, respectively. Depreciation expense for the nine months ended March 31, 2023 and 2022 was $25,911 and $22,944,~~$8,067, respectively.

~~The Company recognized impairment charges of $244 and $584 during~~During the three ~~and nine~~ months ended ~~March 31,~~September 30, 2023, ~~respectively, relating to~~the Company completed the sale of a facility in the United States ~~that~~for total cash proceeds of $1,182, net of brokerage and other fees, resulting in a loss in the amount of $68, which is included as a component of other income, net on the Consolidated Statement of Operations. The facility was held for ~~sale. The facility had~~sale as of June 30, 2023 with a net carrying ~~value~~amount of ~~$1,250 and $1,840 as of March 31, 2023 and June 30, 2022,respectively.~~$1,250.

~~During~~

6. LEASES

The Company leases office space, warehouse and distribution facilities, manufacturing equipment and vehicles primarily in North America and Europe. The Company determines if an arrangement is or contains a lease at inception. Lease terms may include options to extend or terminate the ~~nine months ended March 31, 2022,~~lease when it is reasonably certain that the Company ~~recognized a non-cash impairment charge~~will exercise that option. The Company’s lease agreements generally do not contain residual value guarantees or material restrictive covenants.

Some of ~~$303 relating to a facility~~the Company’s leases contain variable lease payments, which are expensed as incurred unless those payments are based on an index or rate. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at lease commencement and included in the ~~United Kingdom.~~

~~Table~~measurement of ~~Contents~~

~~7. LEASES~~the lease liability; thereafter, changes to lease payments due to rate or index changes are recorded as variable lease expense in the period incurred. The Company does not have any related party leases, and sublease transactions are de minimis.

The components of lease expenses for the three ~~and nine~~ months ended ~~March 31,~~September 30, 2023 and 2022 were as follows:


	Three Months Ended
	September 30, 2023		September 30, 2022
Operating lease expenses	$	4,578	$	4,975



Finance lease expenses	37		69
Variable lease expenses	182		180
Short-term lease expenses	395		496
Total lease expenses	$	5,192	$	5,720

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Three Months Ended Nine Months Ended
March 31, 2023 March 31, 2022 March 31, 2023 March 31, 2022
Operating lease expenses $ 6,657 $ 4,155 $ 13,869 $ 11,572
Finance lease expenses 48 50 188 187
Variable lease expenses 207 129 556 838
Short-term lease expenses 726 813 1,612 2,855
Total lease expenses $ 7,638 $ 5,147 $ 16,225 $ 15,452

Supplemental balance sheet information related to leases was as follows:


Leases	Leases	Classification	March 31, 2023		June 30, 2022		Leases	Classification	September 30, 2023		June 30, 2023
Assets	Assets						Assets
Operating lease ROU assets, net	Operating lease ROU assets, net	Operating lease right-of-use assets, net	$	98,306	$	114,691	Operating lease ROU assets, net	Operating lease right-of-use assets, net	$	102,540	$	95,894

Finance lease ROU assets, net	Finance lease ROU assets, net	Property, plant and equipment, net	312		413		Finance lease ROU assets, net	Property, plant and equipment, net	268		289

Total leased assets	Total leased assets		$	98,618	$	115,104	Total leased assets		$	102,808	$	96,183

Liabilities	Liabilities						Liabilities
Current	Current						Current
Operating	Operating	Accrued expenses and other current liabilities	$	10,827	$	13,154	Operating	Accrued expenses and other current liabilities	$	10,152	$	10,489

Finance	Finance	Current portion of long-term debt	84		149		Finance	Current portion of long-term debt	84		83

Non-current	Non-current						Non-current
Operating	Operating	Operating lease liabilities, noncurrent portion	91,885		107,481		Operating	Operating lease liabilities, noncurrent portion	97,165		90,014
Finance	Finance	Long-term debt, less current portion	243		278		Finance	Long-term debt, less current portion	200		222
Total lease liabilities	Total lease liabilities		$	103,039	$	121,062	Total lease liabilities		$	107,601	$	100,808

Additional information related to leases is as follows:
Nine Months Ended
March 31, 2023 March 31, 2022
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 12,299 $ 11,632
Operating cash flows from finance leases $ 12 $ 16
Financing cash flows from finance leases $ 137 $ 182
ROU assets obtained in exchange for lease obligations:
Operating leases(1)
$ (2,740) $ 8,198
Finance leases $ 60 $ 251
Weighted average remaining lease term:
Operating leases 10.5 years 9.0 years
Finance leases 4.1 years 4.2 years
Weighted average discount rate:
Operating leases 4.7 % 3.3 %
Finance leases 4.5 % 4.0 %

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


	Three Months Ended
	September 30, 2023			September 30, 2022
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	4,215		$	3,968
Operating cash flows from finance leases	$	3		$	4
Financing cash flows from finance leases	$	19		$	52
ROU assets obtained in exchange for lease obligations:
Operating leases	$	10,986		$	7,143
Finance leases	$	—		$	26


Weighted average remaining lease term:
Operating leases	10.3 years			10.2 years
Finance leases	3.6 years			4.1 years
Weighted average discount rate:
Operating leases	5.1		%	4.5		%
Finance leases	4.5		%	4.3		%

Maturities of lease liabilities as of ~~March 31,~~September 30, 2023 were as follows:


Fiscal Year	Fiscal Year	Operating leases		Finance leases		Total		Fiscal Year	Operating leases		Finance leases		Total
2023 (remainder of year)		$	3,818	$	25	$	3,843
2024		15,038		95		15,133
2024 (remainder of year)								2024 (remainder of year)	$	11,808	$	71	$	11,879
2025	2025	12,755		93		12,848		2025	14,261		93		14,354
2026	2026	12,072		68		12,140		2026	13,605		68		13,673
2027	2027	11,772		53		11,825		2027	13,307		53		13,360
2028								2028	13,390		25		13,415
Thereafter	Thereafter	77,724		25		77,749		Thereafter	74,979		—		74,979
Total lease payments	Total lease payments	133,179		359		133,538		Total lease payments	141,350		310		141,660
Less: Imputed interest	Less: Imputed interest	30,467		32		30,499		Less: Imputed interest	34,033		26		34,059
Total lease liabilities	Total lease liabilities	$	102,712	$	327	$	103,039	Total lease liabilities	$	107,317	$	284	$	107,601

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8.7. 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, 2022 $ 695,715 $ 238,081 $ 933,796
  Acquisition(1)
(794) — (794)
  Divestiture(2)
(3,054) — (3,054)
  Translation and other adjustments, net 4,364 (2,583) 1,781
Balance as of March 31, 2023 $ 696,231 $ 235,498 $ 931,729


	North America		International		Total
Balance as of June 30, 2023	$	697,053	$	241,587	$	938,640




Translation	(1,001)		(9,264)		(10,265)
Balance as of September 30, 2023	$	696,052	$	232,323	$	928,375

~~(1)~~ ~~During the nine months ended March 31, 2023, the Company finalized purchase accounting related to THWR resulting in a $794 reduction to goodwill. See Note 4, Acquisition and Disposition.~~

~~(2)~~ ~~During the nine months ended March 31, 2023, the Company completed the divestiture of Westbrae, a component of the United States reporting unit. Goodwill of~~ ~~$3,054~~ ~~was assigned to the divested businesses on a relative fair value basis.~~

~~As a result of the same factors triggering the interim impairment tests for the ParmCrisps~~® ~~and Thinsters~~® ~~trademarks and other intangible assets discussed below, the Company completed~~There were no events or circumstances that warranted an interim impairment test offor goodwill ~~in the U.S. reporting unit~~ during the three months ended ~~March 31,~~September 30, 2023 and concluded that the reporting unit’s estimated fair value exceeded its carrying amount. The fair value of the reporting unit was estimated using an income approach that utilized a discounted cash flow model.or 2022.

Other Intangible Assets

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


		March 31, 2023		June 30, 2022			September 30, 2023		June 30, 2023
Non-amortized intangible assets:	Non-amortized intangible assets:					Non-amortized intangible assets:
Trademarks and tradenames(1)	Trademarks and tradenames(1)	$	266,445	$	379,466	Trademarks and tradenames(1)	$	246,529	$	250,860
Amortized intangible assets:	Amortized intangible assets:					Amortized intangible assets:
Other intangibles(2)	Other intangibles(2)	159,027		199,448		Other intangibles(2)	157,764		161,874
Less: Accumulated amortization	Less: Accumulated amortization	(110,936)		(101,381)		Less: Accumulated amortization	(113,426)		(114,629)
Net amortized intangible assets	Net amortized intangible assets	48,091		98,067		Net amortized intangible assets	44,338		47,245
Net other intangible assets	Net other intangible assets	$	314,536	$	477,533	Net other intangible assets	$	290,867	$	298,105

(1) The gross carrying value of trademarks and ~~trade names~~tradenames is reflected net of ~~$205,373 and $94,873~~$223,981 of accumulated impairment charges as of ~~March 31,~~September 30, 2023 and June 30, ~~2022, respectively.~~2023.

(2) The reduction in carrying value of other intangible assets as of ~~March 31,~~June 30, 2023 reflected a non-cash impairment charge of ~~$45,798~~$45,798 recognized in the ~~third quarter of~~fiscal year ended June 30, 2023.

~~During~~There were no events or circumstances that warranted an interim impairment test for indefinite-lived intangible assets during the three months ended ~~March 31,~~September 30, 2023 ~~as a result of a decline in actual and projected performance and cash flows of the ParmCrisps~~® ~~and Thinsters~~® brands, the Company determined that interim impairment tests of these indefinite-lived trademarks were required to be performed. During the three months ended March 31, 2023, the Company recorded non-cash impairment charges of $102,000 and $8,500 for the ParmCrisps® ~~and Thinsters~~® trademarks, respectively, to reduce the carrying value of such intangible assets to their estimated fair value. The fair value was determined using the relief from royalty method, and impairment charges were recorded within intangibles and long-lived asset impairment on the Consolidated Statements of Operations. The assets are part of the North America reportable segment and have a remaining aggregate carrying value of $12,500 as of March 31, 2023.

~~As a result of the same factors triggering the interim impairment tests for the ParmCrisps~~® ~~and Thinsters~~® ~~trademarks discussed above, the Company completed interim impairment tests of the ParmCrisps~~® ~~and Thinsters~~® ~~asset groups, which were primarily comprised of amortizable customer relationships. The Company determined that the ParmCrisps~~® asset group’s carrying amount exceeded the estimated fair value. During the three months ended March 31, 2023, the Company recorded non-cash impairment charges of $45,798 to reduce the carrying value of the ParmCrisps® ~~customer relationships, the primary asset in the asset group, to their estimated fair~~

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~~value. Impairment charges were recorded within intangibles and long-lived asset impairment on the Consolidated Statements of Operations. The fair value of the Thinsters~~® ~~asset group exceeded its carrying amount. The assets are part of the North America reportable segment and have a remaining aggregate carrying value of $19,767 as of March 31, 2023.~~or 2022.

Amortized intangible assets, which are deemed to have a finite life, primarily consist of customer relationships, trademarks and tradenames and are amortized over their estimated useful lives of 7 to 25 years. Amortization expense included in the Consolidated Statements of Operations was as follows:

Three Months Ended March 31, Nine Months Ended March 31,
2023 2022 2023 2022
Amortization of acquired intangibles $ 2,842 $ 3,110 $ 8,415 $ 7,255


	Three Months Ended September 30,
	2023		2022
Amortization of acquired intangibles	$	1,955	$	2,788

Expected amortization expense over the next five fiscal years is as follows:

Fiscal Year Ending June 30,
2023 (remainder of year) 2024 2025 2026 2027
Estimated amortization expense $ 2,036 $ 6,298 $ 5,245 $ 4,762 $ 4,073


	Fiscal Year Ending June 30,
	2024 (remainder of year)		2025		2026		2027		2028
Estimated amortization expense	$	4,454	$	5,505	$	5,082	$	5,010	$	3,870

The weighted average remaining amortization period of amortized intangible assets is ~~8.4~~10.9 years.

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8. DEBT AND BORROWINGS

Debt and borrowings consisted of the following:


		March 31, 2023		June 30, 2022			September 30, 2023		June 30, 2023
Revolving credit facility	Revolving credit facility	$	567,000	$	593,000	Revolving credit facility	$	530,000	$	541,000
Term loans	Term loans	290,625		296,250		Term loans	286,875		288,750
Less: Unamortized issuance costs	Less: Unamortized issuance costs	(1,401)		(1,105)		Less: Unamortized issuance costs	(2,190)		(1,307)
Other borrowings(1)	Other borrowings(1)	333		498		Other borrowings(1)	284		305
		856,557		888,643			814,969		828,748
Short-term borrowings and current portion of long-term debt(2)	Short-term borrowings and current portion of long-term debt(2)	7,575		7,705		Short-term borrowings and current portion of long-term debt(2)	7,568		7,567
Long-term debt, less current portion	Long-term debt, less current portion	$	848,982	$	880,938	Long-term debt, less current portion	$	807,401	$	821,181

(1) Includes ~~$327 (June~~$284 (June 30, ~~2022: $427)~~2023: $305) of finance lease obligations as discussed in Note 7,6, Leases.

(2) Includes $84 (~~June~~(June 30, ~~2022: $149)~~2023: $83) of short-term finance lease obligations as discussed in Note 7,6, Leases.

Amended and Restated Credit Agreement

On ~~December~~August 22, ~~2021,~~2023, the Company ~~refinanced its revolving credit facility by entering~~entered into a ~~Fourth Amended and Restated~~Second Amendment (the “Second Amendment”) to the Credit Agreement (as amended by a First Amendment dated December 16, 2022, the “Credit Agreement”). The Credit Agreement provides for senior secured financing of ~~$1,100,000~~$1,100 million in the aggregate, consisting of (1) ~~$300,000~~$300 million in aggregate principal amount of term loans (the “Term Loans”) and (2) an ~~$800,000~~$800 million senior secured revolving credit facility (which includes borrowing capacity available for letters of credit, and is comprised of a ~~$440,000~~$440 million U.S. revolving credit facility and ~~$360,000~~$360 million global revolving credit facility) (the “Revolver”). Both the Revolver and the Term Loans mature on December 22, 2026.

The Credit Agreement includes financial covenants that require compliance with a consolidated interest coverage ratio, a consolidated leverage ratio and a consolidated secured leverage ratio. The minimum consolidated interest coverage ratio is 2.75:1.00. The maximum consolidated leverage ratio is 6.00:1.00. Through December 31, 2023 or such earlier date as elected byDuring the Company (the “Amendment Period”), the maximum consolidated secured leverage ratio is 5.00:1.00. Following the Amendment Period, the maximum consolidated secured leverage ratio will be 4.25:1.00, subject to possible temporary increase following certain corporate acquisitions.

~~During the~~Second Amendment Period, loans under the Credit Agreement will bear interest at (a) Term SOFR plus ~~a credit spread adjustment of 0.10% (as adjusted, “Term SOFR”) plus 2.0%~~2.5% per annum or (b) the Base Rate ~~(as defined in the Credit Agreement)~~ plus ~~1.0%~~1.5% per annum. Following the Second Amendment Period, ~~loans~~Loans will bear interest at rates based on (a) Term SOFR plus a rate ranging from ~~0.875%~~

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1.125% to ~~1.750%~~2.0% per annum or (b) the Base Rate plus a rate ranging from ~~0.00%~~0.125% to ~~0.750%~~1.0% per annum, the relevant rate in each case being the Applicable Rate. The Applicable Rate following the Second Amendment Period will be determined in accordance with a leverage-based pricing grid, as set forth in the Credit ~~Agreement. The~~Agreement as amended by the Second Amendment. Excluding hedge impact, the weighted average interest rate on outstanding borrowings under the Credit Agreement at ~~March 31,~~September 30, 2023 was ~~5.90%~~7.86%. Additionally, the Credit Agreement contains a Commitment Fee (as defined in the Credit Agreement) on the amount unused under the Credit Agreement ranging from 0.15% to 0.25% per annum, and such Commitment Fee is determined in accordance with a leverage-based pricing grid.

The Credit Agreement includes financial covenants that require compliance with a consolidated interest coverage ratio, a consolidated leverage ratio and a consolidated secured leverage ratio. Pursuant to the Second Amendment, the Company’s maximum consolidated secured leverage ratio was amended to be 5.00:1.00 until September 30, 2023, 5.25:1.00 until December 31, 2023 and 5.00:1.00 until December 31, 2024 (the period of time during which such maximum consolidated secured leverage ratios are in effect, the “Second Amendment Period,” which the Company may elect to end early). Following the Second Amendment Period, the maximum consolidated secured leverage ratio will be 4.25:1.00, subject to possible temporary increase following certain corporate acquisitions. Pursuant to the Second Amendment, the Company’s minimum interest coverage ratio was amended to be 2.50:1.00.

As of ~~March 31,~~September 30, 2023, there were ~~$567,000~~$530,000 of loans under the Revolver, ~~$290,625~~$286,875 of Term Loans, and ~~$4,054~~$4,468 of letters of credit outstanding under the Credit Agreement. As of ~~March 31,~~September 30, 2023, ~~$228,946~~$265,532 was available under the Credit Agreement, subject to compliance with the financial covenants. As of ~~March 31,~~September 30, 2023, the Company was in compliance with all associated covenants.

Credit Agreement Issuance Costs

In connection with the First Amendment to its Credit Agreement during the second quarter of fiscal year 2023, the Company incurred debt issuance costs of approximately $1,987, of which $1,916 was deferred. Of the total deferred costs, $1,396 were associated with the Revolver and are being amortized on a straight-line basis within Other assets on ~~our~~the Consolidated Balance Sheets, and $520 are being amortized on a straight-line basis, which approximates the effective interest method, as an adjustment to the carrying amount of the Term Loans as a component of Interest and other financing expense, net over the term of the Credit Agreement.

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~~10.~~In connection with the Second Amendment to its Credit Agreement, the Company incurred debt issuance costs of approximately $3,854, of which $3,813 was deferred. Of the total deferred costs, $2,802 were associated with the Revolver and are being amortized on a straight-line basis within Other assets on the Consolidated Balance Sheets, and $1,011 are being recorded as an adjustment to the carrying amount of the Term Loans as a component of Interest and other financing expense, net over the term of the Credit Agreement utilizing the effective interest rate method.

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

9. 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. 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 ~~25.6%~~35.3% and an expense of ~~23.7%~~26.5% for the three months ended ~~March 31, 2023 and 2022, respectively. The effective income tax rate was a benefit of 24.1% and an expense of 20.3% for the nine months ended March 31,~~September 30, 2023 and 2022, respectively. The effective income tax rate for the ~~nine~~three months ended ~~March 31,~~September 30, 2023 ~~was impacted by ParmCrisps~~®increased due to tax expense related to stock-based compensation, global intangible low-taxed income (“GILTI”), and ~~Thinsters~~® ~~trademarks and ParmCrisps~~® ~~asset group impairment charges~~ ~~(See Note 8, Goodwill and Other Intangible Assets), gain on the sale of Westbrae, an operating lease modification during the second quarter, severance with respect to our former CEO (as part of the limitation~~limitations on the deductibility of executive compensation), stock-based compensation and changes in uncertain tax positions. The effective income tax rate for the nine months ended March 31, 2022 was impacted by the reversal of uncertain tax position accruals based on filing and approval of certain elections by taxing authorities, deductions related to stock-based compensation, non-deductible transaction costs related to the acquisition of THWR ~~(see Note 4, Acquisition and Disposition), the reversal of a valuation allowance due to the utilization of a capital loss carryover and the finalization of fiscal year 2021 U.S. income tax returns.~~compensation. The effective income tax rates in each period were also impacted by the geographical mix of earnings and state income taxes.

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~~11.~~10. ACCUMULATED OTHER COMPREHENSIVE LOSS

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

Three Months Ended March 31, Nine Months Ended March 31,
2023 2022 2023 2022
Foreign currency translation adjustments:
Other comprehensive income (loss) income before reclassifications $ 15,250 $ (18,701) $ 7,774 $ (43,649)
Deferred (losses) gains on cash flow hedging instruments:
Amount of (loss) gain recognized in AOCL on derivatives (1)
(3,190) 2,007 7,718 3,544
Amount of gain reclassified from AOCL into income (1)
(1,320) (553) (3,500) (1,517)
Deferred (losses) gains on fair value hedging instruments:
Amount of (loss) gain recognized in AOCL on derivatives (1)
(28) — 50 —
Amount of loss reclassified from AOCL into expense (1)
157 — 396 —
Deferred (losses) gains on net investment hedging instruments:
Amount of (loss) gain recognized in AOCL on derivatives (1)
(108) 1,240 201 4,610
Amount of gain reclassified from AOCL into income (1)
(360) (113) (1,102) (327)
Net change in AOCL $ 10,401 $ (16,120) $ 11,537 $ (37,339)



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












Balance at June 30, 2022	$	(168,225)	$	519	$	500	$	2,724	$	(164,482)
Other comprehensive (loss) income before reclassifications	(67,149)		11,360		1,145		4,666		(49,978)
Amounts reclassified into income	—		(767)		(1,348)		(369)		(2,484)
Net change in accumulated other comprehensive (loss) income for the three months ended September 30, 2022(1)	(67,149)		10,593		(203)		4,297		(52,462)
Balance at September 30, 2022	$	(235,374)	$	11,112	$	297	$	7,021	$	(216,944)

Balance at June 30, 2023	$	(138,028)	$	10,898	$	685	$	229	$	(126,216)
Other comprehensive (loss) income before reclassifications	(32,933)		4,159		430		1,741		(26,603)
Amounts reclassified into income	—		(1,715)		(717)		(372)		(2,804)
Net change in accumulated other comprehensive (loss) income for the three months ended September 30, 2023(1)	(32,933)		2,444		(287)		1,369		(29,407)
Balance at September 30, 2023	$	(170,961)	$	13,342	$	398	$	1,598	$	(155,623)

(1)See Note ~~15,~~ 14, Derivatives and Hedging Activities, for the amounts reclassified into income for deferred gains ~~(losses)~~ on ~~cash flow~~ hedging instruments recorded in the Consolidated Statements of Operations induring the three ~~and nine~~ months ended ~~March 31,~~September 30, 2023 and 2022.

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~~12.~~11. STOCK-BASED COMPENSATION AND INCENTIVE PERFORMANCE PLANS

Under the Company's Amended and Restated 2002 Long-Term Incentive and Stock Award Plan (the ~~"2002 Plan"~~“2002 Plan”), the Company historically granted equity-based awards to its officers, senior management, other key employees, consultants, and directors. The Company currently utilizes a stockholder-approved plan, The Hain Celestial Group, Inc. 2022 Long Term Incentive and Stock Award Plan (the “2022 Plan”) which was approved at the Company’s 2022 Annual Meeting of Stockholders held on November 17, 2022. The 2022 Plan permits the Company to continue making equity-based and other incentive awards in a manner intended to properly incentivize its employees, directors, consultants and other service providers by aligning their interests with the interests of the Company’s stockholders. The Company also historically granted shares under its 2019 Equity Inducement Award Program (the ~~"2019~~“2019 Inducement ~~Program"~~Program”) to induce selected individuals to become employees of the Company. The 2002 Plan, the 2022 Plan and the 2019 Inducement Program are collectively referred to as the ~~"Stock~~“Stock Award Plans."” In conjunction with the Stock Award Plans, the Company maintains a long-term incentive program (the “LTI Program” or ~~"LTIP"~~“LTIP”) that provides for equity awards, including performance and market-based equity awards that can be earned over defined performance periods. The Company's LTIP plans, with the exception of the 2023 - 2025 LTIP described below, are described in Note 13, Stock-Based Compensation and Incentive Performance Plans, in the Notes to the Consolidated Financial Statements in the Form 10-K.

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


		Three Months Ended March 31,				Nine Months Ended March 31,					Three Months Ended September 30,
		2023		2022		2023		2022			2023		2022
Selling, general and administrative expense	Selling, general and administrative expense	$	3,228	$	3,846	$	10,657	$	12,289	Selling, general and administrative expense	$	3,742	$	3,994

Related income tax benefit	Related income tax benefit	$	464	$	438	$	1,417	$	1,145	Related income tax benefit	$	456	$	402

Restricted Stock

Awards of restricted stock are either restricted stock awards ~~("RSAs"~~(“RSAs”) or restricted stock units ~~("RSUs"~~(“RSUs”) that are issued at no cost to the recipient. Performance-based or market-based RSUs are issued in the form of performance share units ~~("PSUs"~~(“PSUs”). A summary of the restricted ~~stock~~stock activity (including all RSAs, RSUs and PSUs) for the ~~nine~~three months ended ~~March 31,~~September 30, 2023 is as follows:


		Number of Shares and Units	Weighted Average Grant Date Fair Value (per share)			Number of Shares and Units	Weighted Average Grant Date Fair Value (per share)
Non-vested RSAs, RSUs and PSUs outstanding at June 30, 2022		790	$	42.44
Non-vested RSAs, RSUs and PSUs outstanding at June 30, 2023					Non-vested RSAs, RSUs and PSUs outstanding at June 30, 2023	1,288	$	26.37
Granted	Granted	1,189	$	20.64	Granted	—	$	—
Vested	Vested	(173)	$	38.70	Vested	(239)	$	23.08
Forfeited	Forfeited	(465)	$	33.53	Forfeited	(23)	$	29.74
Non-vested RSAs, RSUs and PSUs outstanding at March 31, 2023		1,341	$	26.68
Non-vested RSAs, RSUs and PSUs outstanding at September 30, 2023					Non-vested RSAs, RSUs and PSUs outstanding at September 30, 2023	1,026	$	26.17

The table above includes a total of 420 shares granted during the nine months ended March 31, 2023 that represent the target number of shares that may be earned based on pre-defined market conditions that are eligible to vest ranging from zero to 200% of target. All such shares relate to the 2023 – 2025 LTIP as further described below. Vested shares during the ~~nine~~three months ended ~~March 31,~~ September 30, 2023 include a total o~~f 5~~of 15 shares related to certain performance-based metrics being met and a total of ~~168~~224 shares related to service-based ~~RSUs~~RSUs. . There were 86 shares surrendered for payment of employee payroll taxes due on shares issued under stock-based compensation plans at an average price of $10.17 per share. There are market-based PSU awards outstanding under both the 2023 – 2025 LTIP and the 2022 – 2024 LTIP. At ~~March 31,~~September 30, 2023, ~~321~~311 of such shares were outstanding under the 2023 – 2025 LTIP while 6861 shares were outstanding under the 2022 – 2024 LTIP.

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


	Three Months Ended September 30,
	2023		2022
Fair value of RSAs, RSUs and PSUs granted	$	—	$	19,839
Fair value of shares vested	$	2,422	$	576
Tax benefit recognized from restricted shares vesting	$	281	$	78

2016

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Nine Months Ended March 31,
2023 2022
Fair value of RSAs, RSUs and PSUs granted $ 24,560 $ 37,005
Fair value of shares vested $ 3,467 $ 71,285
Tax benefit recognized from restricted shares vesting $ 520 $ 3,643

At ~~March 31,~~September 30, 2023, there was ~~$22,478~~$13,677 of unrecognized stock-based compensation expense related to non-vested restricted stock awards which is expected to be recognized over a weighted average period of ~~1.8~~1.66 years.

2023-2025 LTIP

~~During the nine months ended March 31,~~At September 30, 2023, ~~the Company granted market-based PSU awards~~there are 311 such shares outstanding under the LTI ~~Program with a total target payout of 420 shares of common stock.~~Program. Such PSU awards ~~(the "Absolute TSR PSUs")~~ will vest, if at all, pursuant to a defined calculation of either relative TSR or absolute TSR (as defined) over the period from September 6, 2022 through the earlier of (i) September 6, 2025; (ii) the date the participant’s employment is terminated due to death or Disability (as defined); or (iii) the effective date of a Change in Control (as defined) (the ~~“TSR~~“2023 TSR Performance Period”). Vesting of ~~281~~208 target shares of the outstanding PSU awards is pursuant to a defined calculation of relative TSR over the 2023 TSR Performance Period (the ~~“Relative~~“2023 Relative TSR PSUs”). Vesting of ~~139~~103 target shares of the outstanding PSU awards is pursuant to the achievement of pre-established three-year compound annual TSR targets over the 2023 TSR Performance Period (the ~~“Absolute~~“2023 Absolute TSR PSUs”). Total shares eligible to vest for both the 2023 Relative TSR PSUs and 2023 Absolute TSR PSUs range from zero to 200% of the target amount. Grant date fair values are calculated using a ~~Monte-Carlo~~Monte Carlo simulation model with grant date fair values per target share and related valuation assumptions as follows ~~except~~ for ~~shares granted after December 31, 2022:~~grants prior to January 1, 2023:


		Absolute TSR PSUs		Relative TSR PSUs			Absolute TSR PSUs			Relative TSR PSUs
Grant date fair value (per target share)	Grant date fair value (per target share)	$20.18		$27.47		Grant date fair value (per target share)	$	20.18		$	27.47
Risk-free interest rate	Risk-free interest rate	3.54	%	3.54	%	Risk-free interest rate	3.54		%	3.54		%
Expected dividend yield	Expected dividend yield	—		—		Expected dividend yield	—			—
Expected volatility	Expected volatility	40.30	%	26.60	%	Expected volatility	40.30		%	26.60		%
Expected term	Expected term	3.00 years		3.00 years		Expected term	3.00 years			3.00 years

~~CEO Succession~~

On November 22, 2022, the Board approved a succession plan pursuant to which the Board appointed Wendy P. Davidson to the role of President and Chief Executive Officer and as a director on the Board, in each case effective as of January 1, 2023 (the “Start Date”).

On the Start Date, Ms. Davidson received the following awards under the 2023-2025 LTIP: 36 Relative TSR PSUs (at target), 18 Absolute TSR PSUs (at target) and 36 RSUs. The Relative TSR PSUs and Absolute TSR PSUs have the same TSR Performance Period, performance goals and beginning stock price as those applicable to awards granted to other employees under the 2023-2025 LTIP. The RSUs will vest in one-third (1/3) installments on each of September 6, 2023, 2024 and 2025. Additionally, in recognition of the compensation Ms. Davidson forfeited by leaving her former employer, on the Start Date Ms. Davidson also received a one-time make-whole RSU award of 95 RSUs that will vest i~~n one-third (1/3) installments on each of the first, second and third anniversaries of the Start Date.~~ Grant date fair values ~~were~~are calculated using a ~~Monte-Carlo~~Monte Carlo simulation model with grant date fair values per target share and related valuation assumptions as ~~follows:~~follows for grants on or subsequent to January 1, 2023:


	Absolute TSR PSUs			Relative TSR PSUs
Grant date fair value (per target share)	$	13.84		$	19.54
Risk-free interest rate	4.28		%	4.28		%
Expected dividend yield	—			—
Expected volatility	40.70		%	28.20		%
Expected term	3.00 years			3.00 years

~~Table of Contents~~

As part of the succession plan, Mark L. Schiller transitioned from his position as President and Chief Executive Officer of the Company effective as of December 31, 2022 (the “Transition Date”). Mr. Schiller remains a director on the Board following the Transition Date. As of the Transition Date, certain of Mr. Schiller's stock-based compensation awards were modified and others were forfeited. Additionally, Mr. Schiller will receive severance totaling $4,725, paid in installments over a two-year period following the Transition Date. Severance, including payroll taxes and other costs, was recognized during the nine months ended March 31, 2023, and unpaid amounts are accrued at March 31, 2023.

~~13.~~12. INVESTMENTS

On October 27, 2015, the Company acquired a minority equity interest in Chop’t Creative Salad Company LLC, predecessor to Founders Table Restaurant Group, LLC (“Founders Table”). Founders Tableowns and operates the fast-casual restaurant chains Chop't Creative Salad Co. and Dos Toros Taqueria. The investment is being accounted for as an equity method investment due to the Company’s representation on the Board of Directors of Founders Table. At ~~March 31,~~September 30, 2023 and June 30, ~~2022,~~2023, the carrying value of the Company’s investment in Founders Table was ~~$7,788~~$7,654 and ~~$9,491,~~$8,032, respectively, and is included in the Consolidated Balance Sheets as a component of Investments and joint ventures.

The Company also holds an investment in Hutchison Hain Organic Holdings Limited, a joint venture with HUTCHMED (China) Limited, accounted for under the equity method of accounting. The carrying value of ~~the remaining investments were $4,932~~its investment was $4,644 and ~~$4,965~~$4,766 as of ~~March 31,~~September 30, 2023 and June 30, ~~2022,~~2023, respectively, and is included in the Consolidated Balance Sheets as a component of Investments and joint ventures.

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~~14.~~13. FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE ~~MEASUREMENTS~~

The Company’s financial assets and liabilities measured at fair value are required to be grouped in one of three levels. The levels prioritize the inputs used to measure the fair value of the assets or liabilities. These levels are:

•Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

•Level 2 – Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

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

The following table presents assets and liabilities measured at fair value on a recurring basis as of ~~March 31,~~September 30, 2023:

Total
Quoted
prices in
active
markets
(Level 1)
Significant
other
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
Assets:
Derivative financial instruments $ 8,858 $ — $ 8,858 $ —
Liabilities:
Derivative financial instruments $ 540 $ — $ 540 $ —

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	Total		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets:

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


Liabilities:
Derivative financial instruments	$	901	—		$	901	—

The following table presents assets and liabilities measured at fair value on a recurring basis as of June 30, ~~2022:~~2023:


		Total		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)			Total		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets:	Assets:									Assets:

Derivative financial instruments	Derivative financial instruments	$	7,476	$	—	$	7,476	$	—	Derivative financial instruments	$	16,988	$	—	$	16,988	$	—
Equity investment		560		560		—		—
Total		$	8,036	$	560	$	7,476	$	—
Liabilities:	Liabilities:									Liabilities:

Derivative financial instruments	Derivative financial instruments	3,184		—		3,184		—		Derivative financial instruments	$	3,160	$	—	$	3,160	$	—

Total		$	3,184	$	—	$	3,184	$	—

There were no transfers of financial instruments between the three levels of fair value hierarchy during the ~~nine~~three months ended ~~March 31,~~September 30, 2023 or 2022.

Derivative Instruments

The Company uses interest rate swaps to manage its interest rate risk and cross-currency swaps and foreign currency exchange contracts to manage its exposure to fluctuations in foreign currency exchange rates. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves.

The Company incorporates credit valuation adjustments to appropriately reflect both the Company’s nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of the Company’s derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees.

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Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. The Company has determined that the significance of the impact of the credit valuation adjustments made to its derivative contracts, which determination was based on the fair value of each individual contract, was not significant to the overall valuation. As a result, all of the derivatives held as of ~~March 31,~~September 30, 2023 and June 30, ~~2022~~2023 were classified as Level 2 ~~within~~of the fair value hierarchy.

Nonrecurring Fair Value Measurements

The Company measures certain non-financial assets at fair value on a nonrecurring basis including goodwill, intangible assets, property and equipment and right-of-use lease assets. These assets were initially measured and recognized at amounts equal to the fair value determined as of the date of acquisition or purchase subject to changes in value only for foreign currency translation. Periodically, these assets are tested for impairment by comparing their respective carrying values to the estimated fair value of the reporting unit or asset group in which they reside. In the event any of these assets were to become impaired, the Company would recognize an impairment expense equal to the amount by which the carrying value of the reporting unit, impaired asset or asset group exceeds its estimated fair value. For indefinite-lived intangible assets, the relief from royalty approach is dependent on a number of factors, including estimates of future growth and trends, royalty rates in the category of intellectual property, discount rates and other variables. Fair value measurements of reporting units are estimated using an income approach involving discounted cash flow models that contain certain Level 3 inputs requiring significant management judgment, including projections of economic conditions, customer demand and changes in competition, revenue growth rates, gross profit margins, operating margins, capital expenditures, working capital requirements, terminal growth rates and discount rates. Fair value measurements of the reporting units associated with ~~our~~the Company's goodwill balances and ~~our~~its indefinite-lived intangible assets are estimated at least annually in the fourth quarter of each fiscal year for purposes of impairment testing if a quantitative

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

~~During the three months ended March 31, 2023, the Company recorded non-cash impairment charges of $102,000 and $8,500 for the ParmCrisps~~® ~~and Thinsters~~® ~~trademarks, respectively. Due to the same factors triggering the interim impairment tests for the ParmCrisps~~® ~~and Thinsters~~® ~~trademarks, the Company completed an interim impairment test of the ParmCrisps~~® ~~and Thinsters~~® ~~asset group and recorded a non-cash impairment charges of $45,798 for the ParmCrisps~~® ~~asset group~~ ~~(see Note 8, Goodwill and Other Intangible Assets). As of March 31, 2023, THWR intangible assets were classified as Level 3 assets measured at fair value on a nonrecurring basis with estimated fair value of $32,267.~~

~~15.~~14. DERIVATIVES AND HEDGING ACTIVITIES

Risk Management Objective of Using Derivatives

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company manages its exposures to a wide variety of business and operational risks. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s receivables and borrowings.

Certain of the Company’s foreign operations expose the Company to fluctuations of foreign exchange rates. These fluctuations may impact the value of the Company’s cash receipts and payments in terms of the Company’s functional currency. The Company enters into derivative financial instruments to protect the value or fix the amount of certain assets and liabilities in terms of its functional currency, the U.S. ~~Dollar.~~

~~Accordingly,~~Dollar.Accordingly, the Company uses derivative financial instruments to manage and mitigate such risks. The Company does not use derivatives for speculative or trading purposes.

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. During the three ~~and nine~~ months ended ~~March 31,~~September 30, 2023 and 2022, such derivatives were used to hedge the variable cash flows associated with existing variable rate debt.

For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in AOCL and subsequently reclassified into interest expense in the same period during which the hedged transaction affects earnings. Amounts reported in AOCL related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable rate debt. During the remaining ~~three~~nine months of fiscal ~~2023,~~2024, the Company estimates that an additional ~~$1,873~~$6,967 will be reclassified as a decrease to interest expense.

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As of ~~March 31,~~September 30, 2023, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:

Interest Rate Derivative

Number of Instruments

Notional Amount

Interest Rate Derivative

Number of Instruments

Notional Amount

Interest Rate Swap

$400,000

Interest rate swap

$400,000

Cash Flow Hedges of Foreign Exchange Risk

The Company is exposed to fluctuations in various foreign currencies against its functional currency, the U.S. Dollar. The Company uses foreign currency derivatives including cross-currency swaps to manage its exposure to fluctuations in the USD-EUR exchange rates. Cross-currency swaps involve exchanging fixed-rate interest payments for fixed-rate interest receipts,

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both of which will occur at the USD-EUR forward exchange rates in effect upon entering into the ~~instrument.~~instrument. The Company, at times, also uses forward contracts to manage its exposure to fluctuations in the GBP-EUR exchange rates. The Company designates these derivatives as cash flow hedges of foreign exchange ~~risks.~~risk.

For derivatives designated and that qualify as cash flow hedges of foreign exchange risk, the gain or loss on the derivative is recorded in AOCL and subsequently reclassified in the period(s) during which the hedged transaction affects earnings within the same income statement line item as the earnings effect of the hedged ~~transaction~~.transaction. During the remaining ~~three~~nine months of fiscal ~~2023,~~2024, the Company ~~estimate~~sestimates that no amount relating to the cross-currency swaps will be reclassified to interest expense.

As of ~~March 31,~~September 30, 2023, the Company had nothe following outstanding foreign currency derivatives that were used to hedge its foreign exchange ~~risks.~~risk.


Foreign Currency Derivative	Number of Instruments	Notional Sold	Notional Purchased

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

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 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 ~~accumulated other comprehensive loss~~AOCL as part of the cumulative translation adjustment. Amounts are reclassified out of ~~accumulated other comprehensive loss~~AOCL into earnings when the hedged net investment is either sold or substantially liquidated.

As of ~~March 31,~~September 30, 2023, the Company had the following outstanding foreign currency derivatives that were used to hedge its net investments in foreign operations:


Foreign Currency Derivative	Number of Instruments	Notional Sold	Notional Purchased
Cross-currency swap	4	€100,300	$105,804

Fair Value Hedges

The Company is exposed to changes in the fair value of certain of its foreign denominated intercompany loans due to changes in foreign exchange spot rates. The Company uses fixed-to-fixed cross-currency swaps to hedge its exposure to changes in foreign exchange rates affecting gains and losses on intercompany loan principal and interest. Cross-currency swaps involve the receipt of functional-currency-fixed-rate amounts from a counterparty in exchange for the Company making foreign-currency-fixed-rate payments over the life of the agreement.

For derivatives designated and that qualify as fair value hedges, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in interest and other financing expense, net.

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Gains and losses on the derivative representing hedge components excluded from the assessment of effectiveness are recognized over the life of the hedge on a systematic and rational basis, as documented at hedge inception in accordance with the Company’s accounting policy election. The earnings recognition of excluded components is presented in the same income statement line item as the earnings effect of the hedged transaction. During the remaining ~~three~~nine months of fiscal ~~2023,~~2024, the Company estimates that an additional ~~$121~~$359 relating to cross currency swaps will be reclassified as a decrease to interest expense.

As of ~~March 31,~~September 30, 2023, the Company had the following outstanding foreign currency derivatives that were used to hedge changes in fair value attributable to foreign exchange risk:


Foreign Currency Derivative	Number of Instruments	Notional Sold	Notional Purchased
Cross-currency swap	1	€24,700	$26,021

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


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

	September 30, 2023		June 30, 2023		September 30, 2023		June 30, 2023
Intercompany loan receivable	$	26,115	$	26,945	$	830	$	924

Carrying Amount of the Hedged Asset
Cumulative Amount of Fair Value Hedge Adjustment Included in the Carrying Amount of the Hedged Asset
March 31,
2023 June 30,
2022 March 31,
2023 June 30,
2022
Intercompany loan receivable $ 26,772 $ 25,899 $ 751 $ 122

Designated Hedges

The following table presents the fair value of the Company’s derivative financial instruments as well as their classification on the Consolidated Balance Sheet as of ~~March 31,~~September 30, 2023:

Asset Derivatives

Liability Derivatives

Asset Derivatives

Liability Derivatives

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Derivatives designated as hedging instruments:

Interest rate swaps

Prepaid expenses and other current assets

6,217

Accrued expenses and other current liabilities

—

Interest rate swaps

Prepaid expenses and other current assets

8,964

Accrued expenses and other current liabilities

—

Interest rate swaps

Other noncurrent assets

277

Other noncurrent liabilities

—

Interest rate swaps

Other noncurrent assets

8,855

Other noncurrent liabilities

—

Cross-currency swaps

Prepaid expenses and other current assets

2,364

Accrued expenses and other current liabilities

—

Cross-currency swaps

Prepaid expenses and other current assets

2,376

Accrued expenses and other current liabilities

—

Cross-currency swaps

Other noncurrent assets

—

Other noncurrent liabilities

540

Cross-currency swaps

Other noncurrent assets

—

Other noncurrent liabilities

901

Foreign currency forward contracts

Prepaid expenses and other current assets

Other noncurrent liabilities

—

Total derivatives designated as hedging instruments

8,858

540

Total derivatives designated as hedging instruments

20,236

901

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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, ~~2022:~~2023:

Asset Derivatives

Liability Derivatives

Asset Derivatives

Liability Derivatives

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Derivatives designated as hedging instruments:

Interest rate swaps

Prepaid expenses and other current assets

4,230

Accrued expenses and other current liabilities

—

Interest rate swaps

Prepaid expenses and other current assets

8,649

Accrued expenses and other current liabilities

—

Interest rate swaps

Other noncurrent assets

—

Other noncurrent liabilities

3,184

Interest rate swaps

Other noncurrent assets

5,974

Other noncurrent liabilities

—

Cross-currency swaps

Prepaid expenses and other current assets

2,400

Accrued expenses and other current liabilities

—

Cross-currency swaps

Prepaid expenses and other current assets

2,365

Accrued expenses and other current liabilities

—

Cross-currency swaps

Other noncurrent assets

846

Other noncurrent liabilities

—

Cross-currency swaps

Other noncurrent assets

—

Other noncurrent liabilities

3,160

Total derivatives designated as hedging instruments

7,476

3,184

Total derivatives designated as hedging instruments

16,988

3,160

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The following table presents the ~~pretax~~pre-tax effect of cash flow hedge accounting on AOCL ~~and Consolidated Statements of Operations~~ for the three months ended ~~March 31,~~September 30, 2023 and 2022:


Derivatives in Cash Flow Hedging Relationships	Derivatives in Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in AOCL on Derivatives				Location of Gain (Loss) Reclassified from AOCL into Income (Expense)	Amount of Gain (Loss) Reclassified from AOCL into Income (Expense)				Derivatives in Cash Flow Hedging Relationships	Amount of Gain Recognized in AOCL on Derivatives				Location of Gain (Loss) Reclassified from AOCL into Income (Expense)	Amount of Gain (Loss) Reclassified from AOCL into Income (Expense)
		Three Months Ended March 31,					Three Months Ended March 31,					Three Months Ended September 30,					Three Months Ended September 30,
		2023		2022			2023		2022			2023		2022			2023		2022
Interest rate swaps	Interest rate swaps	$	(4,285)	$	2,023	Interest and other financing expense, net	$	1,792	$	(64)	Interest rate swaps	$	5,478	$	15,262	Interest and other financing expense, net	$	2,281	$	1,146
Cross-currency swaps	Cross-currency swaps	—		503		Interest and other financing expense, net / Other expense (income), net	(46)		683		Cross-currency swaps	—		—		Interest and other financing expense, net / Other (income) expense, net	—		(115)
Foreign currency forward contracts	Foreign currency forward contracts	—		15		Cost of sales	—		81		Foreign currency forward contracts	41		—		Cost of sales	—		—
Total		$	(4,285)	$	2,541		$	1,746	$	700
												$	5,519	$	15,262		$	2,281	$	1,031

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

Derivatives in Cash Flow Hedging Relationships Amount of Gain (Loss) Recognized in AOCL on Derivatives Location of Gain (Loss) Reclassified from AOCL into Income (Expense) Amount of Gain (Loss) Reclassified from AOCL into Income (Expense)
Nine Months Ended March 31, Nine Months Ended March 31,
2023 2022 2023 2022
Interest rate swaps $ 10,295 $ 2,678 Interest and other financing expense, net $ 4,927 $ (273)
Cross-currency swaps — 1,872 Interest and other financing expense, net / Other expense (income), net (276) 2,085
Foreign currency forward contracts 80 (64) Cost of sales — 107
Total $ 10,375 $ 4,486 $ 4,651 $ 1,919

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~~The following table presents the pretax~~pre-tax effect of the Company’s derivative financial instruments electing cash flow hedge accounting on the Consolidated Statements of Operations for the three months ended of ~~March 31,~~September 30, 2023 and 2022:

Location and Amount of Gain (Loss) Recognized in the Consolidated Statement of Operations on Cash Flow Hedging Relationships
Three Months Ended March 31, 2023 Three Months Ended March 31, 2022
Cost of sales Interest and other financing expense, net Other expense/income, net Cost of sales Interest and other financing expense, net Other expense/income, net
The effects of cash flow hedging:
Gain (loss) on cash flow hedging relationships
Interest rate swaps
Amount of gain (loss) reclassified from AOCL into income $ — $ 1,792 $ — $ — $ (64) $ —
Cross-currency swaps
Amount of (loss) gain reclassified from AOCL into income $ — $ (46) $ — $ — $ 46 $ 637
Foreign currency forward contracts
Amount of gain reclassified from AOCL into income $ — $ — $ — $ 81 $ — $ —

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

Location and Amount of Gain (Loss) Recognized in the Consolidated Statement of Operations on Cash Flow Hedging Relationships
Nine Months Ended March 31, 2023 Nine Months Ended March 31, 2022
Cost of sales Interest and other financing expense, net Other expense (income), net Cost of sales Interest and other financing expense, net Other expense (income), net
The effects of cash flow hedging:
Gain (loss) on cash flow hedging relationships
Interest rate swaps
Amount of gain (loss) reclassified from AOCL into income $ — $ 4,088 $ — $ — $ (273) $ —
Cross-currency swaps
Amount of (loss) gain reclassified from AOCL into income $ — $ (276) $ — $ — $ 131 $ 1,954
Foreign currency forward contracts
Amount of gain reclassified from AOCL into income $ — $ — $ — $ 107 $ — $ —


				Location and Amount of Gain (Loss) Recognized in the Consolidated Statements of Operations on Cash Flow Hedging Relationships
				Three Months Ended September 30, 2023				Three Months Ended September 30, 2022
				Cost of sales		Interest and other financing expense, net			Cost of sales		Interest and other financing expense, net
The effects of cash flow hedging:
	Gain (Loss) on cash flow hedging relationships
		Interest rate swaps
			Amount of gain reclassified from AOCL into income	$	—	$	2,281		$	—	$	1,146

		Cross-currency swaps
			Amount of loss reclassified from AOCL into income	$	—	$	—		$	—	$	(115)

2822

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The following table presents the ~~pretax~~pre-tax effect of fair value hedge accounting on AOCL ~~and Consolidated Statements of Operations as of~~for the three months ended ~~March 31,~~September 30, 2023 and 2022:


Derivatives in Fair Value Hedging Relationships		Amount of Loss Recognized in AOCL on Derivatives				Location of Gain Reclassified from AOCL into Income on Derivatives (Amount Excluded from Effectiveness Testing)	Amount of Gain Reclassified from AOCL into Income on Derivatives (Amount Excluded from Effectiveness Testing)
Derivatives in Fair value Hedging Relationships											Derivatives in Fair value Hedging Relationships	Amount of Gain Recognized in AOCL on Derivatives				Location of Gain Reclassified from AOCL into Income on Derivatives (Amount Excluded from Effectiveness Testing)	Amount of Gain Reclassified from AOCL into Income on Derivatives (Amount Excluded from Effectiveness Testing)
		Three Months Ended March 31,					Three Months Ended March 31,					Three Months Ended September 30,					Three Months Ended September 30,
		2023		2022			2023		2022			2023		2022			2023		2022

Cross-currency swaps	Cross-currency swaps	$	(38)	$	—	Interest and other financing expense, net / Other expense (income), net	$	121	$	—	Cross-currency swaps	$	572	$	1,539	Interest and other financing expense, net	$	123	$	123

												$	572	$	1,539		$	123	$	123

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

Derivatives in Fair Value Hedging Relationships Amount of Gain Recognized in AOCL on Derivatives Location of Gain Reclassified from AOCL into Income on Derivatives (Amount Excluded from Effectiveness Testing) Amount of Gain Reclassified from AOCL into Income on Derivatives (Amount Excluded from Effectiveness Testing)
Nine Months Ended March 31, Nine Months Ended March 31,
2023 2022 2023 2022
Cross-currency swaps $ 85 $ — Interest and other financing expense, net / Other expense (income), net $ 367 $ —

~~The following table presents the pretax~~pre-tax effect of the Company’s derivative financial instruments electing fair value hedge accounting on the Consolidated Statements of Operations ~~for the three months ended~~as of ~~March 31,~~September 30, 2023 and 2022:

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

~~Three Months Ended March 31, 2023~~

~~Three Months Ended March 31, 2022~~

~~Cost of sales~~

~~Interest and other financing expense, net~~

~~Other expense/income, net~~

~~Cost of sales~~

~~Interest and other financing expense, net~~

~~Other expense/income, net~~

~~The effects of fair value hedging:~~

~~Gain (loss) on fair value hedging relationships~~

~~Cross-currency swaps~~

~~Amount of loss reclassified from AOCL into income~~

—

~~(210)~~

—


				Location and Amount of Gain Recognized in the Consolidated Statements of Operations on Fair Value Hedging Relationships
				Three Months Ended September 30, 2023						Three Months Ended September 30, 2022
				Cost of sales		Interest and other financing expense, net		Other expense (income), net		Cost of sales		Interest and other financing expense, net		Other expense (income), net
The effects of fair value hedging:
	Gain on fair value hedging relationships

		Cross-currency swaps
			Amount of gain reclassified from AOCL into income	$	—	$	953	$	—	$	—	$	123	$	1,688

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

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

~~Nine Months Ended March 31, 2023~~

~~Nine Months Ended March 31, 2022~~

~~Cost of sales~~

~~Interest and other financing expense, net~~

~~Other expense (income), net~~

~~Cost of sales~~

~~Interest and other financing expense, net~~

~~Other expense (income), net~~

~~The effects of fair value hedging:~~

~~Gain (loss) on fair value hedging relationships~~

~~Cross-currency swaps~~

~~Amount of loss reclassified from AOCL into income~~

—

~~(506)~~

—

~~The following table presents the pretax~~pre-tax effect of the Company’s net investment hedges on AOCL and the Consolidated Statements of Operations for the three months ended ~~March 31,~~September 30, 2023 and 2022:

Derivatives in Net Investment Hedging Relationships Amount of (Loss) Gain Recognized in AOCL on Derivatives Location of (Loss) Gain Recognized in (Expense) Income on Derivatives Amount of Gain (Loss) Recognized in Income (Expense) on Derivatives
Three Months Ended March 31, Three Months Ended March 31,
2023 2022 2023 2022
Cross-currency swaps $ (144) $ 1,569 Interest and other financing expense, net $ 484 $ 143

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


Derivatives in Net Investment Hedging Relationships	Derivatives in Net Investment Hedging Relationships	Amount of Gain Recognized in AOCL on Derivatives				Location of (Loss) Gain Recognized in (Expense) Income on Derivatives	Amount of (Loss) Gain Recognized in (Expense) Income on Derivatives				Derivatives in Net Investment Hedging Relationships	Amount of Gain Recognized in AOCL on Derivatives				Location of Gain (Loss) Recognized in Income (Expense) on Derivatives (Amount Excluded from Effectiveness Testing)	Amount of Gain (Loss) Recognized in Income (Expense) on Derivatives (Amount Excluded from Effectiveness Testing)
		Nine Months Ended March 31,					Nine Months Ended March 31,					Three Months Ended September 30,					Three Months Ended September 30,
		2023		2022			2023		2022			2023		2022			2023		2022
Cross-currency swaps	Cross-currency swaps	$	335	$	5,836	Interest and other financing expense, net	$	1,474	$	413	Cross-currency swaps	$	2,316	$	6,268	Interest and other financing expense, net	$	495	$	(495)

Credit-Risk-Related Contingent Features

The Company has agreements with each of its derivative counterparties that contain a cross-default provision upon certain defaults by the Company on any of its indebtedness.

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15. TRANSFORMATION PROGRAM

During the first quarter of fiscal year 2024, we initiated a multi-year growth and transformation program (the “Hain Reimagined Program”). The program is intended to optimize the Company’s portfolio, improve underlying profitability and increase its flexibility to invest in targeted growth initiatives, brand building and other capabilities critical to delivering future growth. The savings initiatives are expected to impact the Company’s reportable segments and Corporate and Other.

Implementation of the Hain Reimagined Program is expected to be completed by the end of the 2027 fiscal year and comprised of: contract termination costs, asset write-downs, employee-related costs and other transformation-related expenses.

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


	Three Months Ended September 30, 2023


Corporate and Other	$	5,770
North America	3,358
International	595


	$	9,723

The Company expects to pay the remaining accrued restructuring costs during the next 12 months. The following table displays the activities and liability balances relating to the restructuring program for the period ended as of September 30, 2023:


	Charges		Amounts Paid		Non-cash settlements/Adjustments2		Balance at September 30, 2023
Employee-related costs1	$	1,115	$	(46)	—		$	1,069
Contract termination costs	1,799		(1,528)		—		271
Asset write-downs2	1,521		—		(1,521)		—
Other transformation-related expenses3	5,288		(16)		—		5,272
	$	9,723	$	(1,590)	$	(1,521)	$	6,612

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

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

3Other transformation-related expenses primarily include consultancy charges.

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

16. COMMITMENTS AND CONTINGENCIES

Securities Class Actions Filed in Federal Court

On August 17, 2016, three securities class action complaints were filed in the Eastern District of New York (the ~~"District Court"~~“District Court”) against the Company alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The three complaints are: (1) Flora v. The Hain Celestial Group, Inc., et al. (the “Flora Complaint”); (2) Lynn v. The Hain Celestial Group, Inc., et al. (the “Lynn Complaint”); and (3) Spadola v. The Hain Celestial Group, Inc., et al. (the “Spadola Complaint” and, together with the Flora and Lynn Complaints, the “Securities Complaints”). On June 5, 2017, the District Court issued an order for consolidation, appointment of Co-Lead Plaintiffs and approval of selection of co-lead counsel. Pursuant to this order, the Securities Complaints were consolidated under the caption In re The Hain Celestial Group, Inc. Securities Litigation (the

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~~“Consolidated~~ “Consolidated Securities Action”), and Rosewood Funeral Home and Salamon Gimpel were appointed as Co-Lead Plaintiffs. On June 21, 2017, the Company received notice that plaintiff Spadola voluntarily dismissed his claims without prejudice to his ability to participate in the Consolidated Securities Action as an absent class member. The Co-Lead Plaintiffs in the Consolidated Securities Action filed a Consolidated Amended Complaint on August 4, 2017 and a Corrected Consolidated Amended Complaint on September 7, 2017 on behalf of a purported class consisting of all persons who purchased or otherwise acquired Hain Celestial securities between November 5, 2013 and February 10, 2017 (the “Amended Complaint”). The

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Amended Complaint named as defendants the Company and certain of its former officers (collectively, “Defendants”) and asserted violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 based on allegedly materially false or misleading statements and omissions in public statements, press releases and SEC filings regarding the Company’s business, prospects, financial results and internal controls. Defendants filed a motion to dismiss the Amended Complaint on October 3, 2017 which the District Court granted on March 29, 2019, dismissing the case in its entirety, without prejudice to replead. Co-Lead Plaintiffs filed a Second Amended Consolidated Class Action Complaint on May 6, 2019 (the “Second Amended Complaint”). The Second Amended Complaint again named as defendants the Company and certain of its former officers and asserts violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 based on allegations similar to those in the Amended Complaint, including materially false or misleading statements and omissions in public statements, press releases and SEC filings regarding the Company’s business, prospects, financial results, and internal controls. Defendants filed a motion to dismiss the Second Amended Complaint on June 20, 2019. On April 6, 2020, the District Court granted Defendants’ motion to dismiss the Second Amended Complaint in its entirety, with prejudice. Co-Lead Plaintiffs appealed the District Court’s decision dismissing the Second Amended Complaint to the United States Court of Appeals for the Second Circuit (the "Second Circuit"). By decision dated December 17, 2021, the Second Circuit vacated the District Court’s judgment and remanded the case for further proceedings. On April 6, 2022, the District Court issued an order directing the parties to submit position papers outlining their views regarding: (a) the scope of the Court's reconsideration of Defendants’ Motion to Dismiss the Second Amended Complaint; and (b) the appropriate procedure the Court should follow in light of the Second Circuit's opinion. On April 14, 2022, the District Court entered an order setting the schedule for, and determining the scope of, supplemental briefing on Defendants’ Motion to Dismiss the Second Amended Complaint. The parties submitted supplemental briefing between May 12, 2022 and June 23, 2022. In June 2022, the District Court referred Defendants’ Motion to Dismiss the Second Amended Complaint to a United States Magistrate Judge (the “Magistrate Judge”) for a Report and Recommendation. On November 4, 2022, the Magistrate Judge issued a Report and Recommendation recommending that the District Court grant Defendants’ Motion to Dismiss the Second Amended Complaint with prejudice. Plaintiffs filed Objections to Magistrate Judge’s November 4, 2022 Report and Recommendation on December 7, 2022, and Defendants filed their Opposition to Plaintiffs’ Objections to Magistrate Judge’s November 4, 2022 Report and Recommendation on January 9, 2023. ~~The Parties await a decision from~~On September 29, 2023, the District Court ongranted Defendants’ Motion to Dismiss the Second Amended Complaint. Plaintiffs filed notice of appeal on October 26, 2023.

Additional Stockholder Class Action and Derivative Complaints Filed in Federal Court

On April 19, 2017 and April 26, 2017, two class action and stockholder derivative complaints were filed in the Eastern District of New York against the former Board of Directors and certain former officers of the Company under the captions Silva v. Simon, et al. (the “Silva Complaint”) and Barnes v. Simon, et al. (the “Barnes Complaint”), respectively. Both the Silva Complaint and the Barnes Complaint allege violation of securities law, breach of fiduciary duty, waste of corporate assets and unjust enrichment.

On May 23, 2017, an additional stockholder filed a complaint under seal in the Eastern District of New York against the former Board of Directors and certain former officers of the Company. The complaint alleged 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. The complaint also alleged that the Company violated its by-laws and Delaware law by failing to hold its 2016 Annual Stockholders Meeting and includes claims for breach of fiduciary duty, unjust enrichment and corporate waste. On August 9, 2017, the District Court granted an order to unseal this case and reveal Gary Merenstein as the plaintiff (the “Merenstein Complaint”).

On August 10, 2017, the District Court granted the parties' stipulation to consolidate the Barnes Complaint, the Silva Complaint and the Merenstein Complaint under the caption In re The Hain Celestial Group, Inc. Stockholder Class and Derivative Litigation (the “Consolidated Stockholder Class and Derivative Action”) and to appoint Robbins Arroyo LLP and Scott+Scott as Co-Lead Counsel, with the Law Offices of Thomas G. Amon as Liaison Counsel for Plaintiffs. On September 14, 2017, a related complaint was filed under the caption Oliver v. Berke, et al. (the “Oliver Complaint”), and on October 6, 2017, the Oliver Complaint was consolidated with the Consolidated Stockholder Class and Derivative Action. The Plaintiffs filed their consolidated amended complaint under seal on October 26, 2017. On December 20, 2017, the parties agreed to stay Defendants’ time to answer, move, or otherwise respond to the consolidated amended complaint through and including 30 days after a decision was rendered on the motion to dismiss the Amended Complaint in the Consolidated Securities Action, described above.

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On March 29, 2019, the District Court in the Consolidated Securities Action granted Defendants’ motion, dismissing the Amended Complaint in its entirety, without prejudice to replead. Co-Lead Plaintiffs in the Consolidated Securities Action filed the Second Amended Complaint on May 6, 2019. The parties to the Consolidated Stockholder Class and Derivative Action agreed to continue the stay of Defendants’ time to answer, move, or otherwise respond to the consolidated amended complaint

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through 30 days after a decision on Defendants' motion to dismiss the Second Amended Complaint in the Consolidated Securities Action.

On April 6, 2020, the District Court granted Defendants’ motion to dismiss the Second Amended Complaint in the Consolidated Securities Action, with prejudice. Pursuant to the terms of the stay, Defendants in the Consolidated Stockholder Class and Derivative Action had until May 6, 2020 to answer, move, or otherwise respond to the complaint in this matter. This deadline was extended, and Defendants moved to dismiss the Consolidated Stockholder Class and Derivative Action Complaint on June 23, 2020, with Plaintiffs’ opposition due August 7, 2020.

On July 24, 2020, Plaintiffs made a stockholder litigation demand on the current Board containing overlapping factual allegations to those set forth in the Consolidated Stockholder Class and Derivative Action. On August 10, 2020, the District Court vacated the briefing schedule on Defendants’ pending motion to dismiss in order to give the Board of Directors time to consider the demand. On each of September 8 and October 8, 2020, the District Court extended its stay of any applicable deadlines for 30 days to give the Board of Directors additional time to complete its evaluation of the demand. On November 3, 2020, Plaintiffs were informed that the Board of Directors had finished investigating and resolved, among other things, that the demand should be rejected. On November 6, 2020, Plaintiffs and Defendants notified the District Court that Plaintiffs were evaluating the rejection of the demand, sought certain additional information and were assessing next steps, and requested that the District Court extend the stay for an additional 30 days, to on or around December 7, 2020. The Parties then filed a number of additional joint status reports, requesting that the District Court continue the stay of applicable deadlines through December 30, 2021. In light of the Second Circuit vacating the District Court’s judgment in the Consolidated Securities Action referenced above and remanding the case for further proceedings, the Parties submitted a joint status report on December 29, 2021 requesting that the District Court continue the temporary stay pending the District Court’s reconsideration of the Defendants’ motion to dismiss the Second Amended Complaint in the Consolidated Securities Action. ~~The District Court has extended~~On November 3, 2023, the Parties filed a joint request to continue the temporary stay ~~through September 5, 2023.~~of the Derivative Action pending resolution of the Securities Class Action appeal and await a response from the Court.

Baby Food Litigation

Since February 2021, the Company has been named in numerous consumer class actions alleging that the Company’s Earth’s ~~Best~~®Best® baby food products (the “Products”) contain unsafe and undisclosed levels of various naturally occurring heavy metals, namely lead, arsenic, cadmium and mercury. Those actions have now been transferred and consolidated as a single lawsuit in the U.S. District Court for the Eastern District of New York captioned In re Hain Celestial Heavy Metals Baby Food Litigation, Case No. 2:21-cv-678 (the "Consolidated Proceeding"), which generally alleges that the Company violated various state consumer protection laws and asserts other state and common law warranty and unjust enrichment claims related to the alleged failure to disclose the presence of these metals, arguing that consumers would have either not purchased the Products or would have paid less for them had the Company made adequate disclosures. The Court appointed interim class counsel for Plaintiffs in the Consolidated Proceeding, and Plaintiffs filed a Consolidated Amended Class Action Complaint on March 18, 2022. The Company filed a motion to dismiss the Consolidated Class Action Complaint on November 7, 2022. The plaintiffs filed their opposition on December 22, 2022, and the Company filed its reply brief on January 20, 2023. ~~The Court scheduled a status conference for~~On May 9, 2023, ~~to address the status~~upon consent of the ~~case, including~~parties, the Court stayed this action pending the Second Circuit’s decision on appeal in In re Beech-Nut Nutrition Co. Baby Food Litigation, 21 Civ. 133 (N.D.N.Y.). Accordingly, the Court denied the Company’s ~~pending~~ motion to ~~dismiss.~~dismiss without prejudice to renew. One consumer class action is pending in New York Supreme Court, Nassau County, which the court has stayed in deference to the Consolidated Proceeding. 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 publishing 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 is providing 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, which motion the Court denied. The Company filed its answer to the New Mexico Attorney General’s amended complaint on April 23, 2022. The Company denies the New

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Mexico Attorney General’s allegations and maintains that its baby foods are safe, properly labeled, and compliant with New Mexico law.

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In addition to the consumer class actions discussed above, the Company is currently named in seven lawsuits in state and federal courts alleging some form of personal injury from the ingestion of the Company’s Products, purportedly due to unsafe and undisclosed levels of various naturally occurring heavy metals. These lawsuits generally allege injuries related to neurological development disorders such as autism and attention deficit hyperactivity disorder.

•In the matter Palmquist ~~et al.~~ v. The Hain Celestial Group, Inc., a jury trial commenced on February 6, 2023 in the ~~U.S.~~United States District Court for the Southern District of Texas. The Company moved for Directed Verdict at the close of Plaintiffs’ case. The Court granted the Company’s motion, finding no liability for the Company. The Court entered Final Judgment in the Company's favor on March 3, 2023. On April 3, 2023, Plaintiffs filed their Notice of Appeal in the Fifth Circuit. Plaintiffs ~~will have 40 days after the Fifth Circuit receives the District Court record within which to file~~filed their appellate brief ~~barring any extensions.~~on July 12, 2023. The Company filed its appellate brief on September 26, 2023. It is expected that the matter will be fully briefed this fall. No argument date has been set.

•In ~~the matter,~~ NC v. The Hain Celestial Group, et al., pending in the Superior Court for the State of California, County of Los Angeles, ~~discovery has closed and~~as a result of successful defense pretrial motions, including the ~~Court has set a trial date of October 4, 2023.~~

•~~There are currently two Nevada state court cases pending in Clark County District Court. The cases, Benitez v. Beech-Nut Nutrition~~Company's motion for summary judgment, the Company Inc., et al. and Buenaventura v. Beech-Nut Nutrition Company, Inc., et al., have been consolidated for the purposes of discovery only. In Benitez, the Court issued a scheduling order in September 2022. Pursuant to this Order, discovery will close on March 7, 2024 andexpects that the case ~~is set for trial starting on July 29, 2024. The parties have engaged in limited discovery. There has been no further activity~~will be dismissed and judgment will soon be entered in the ~~Buenaventura case.~~Company's favor.

•In Watkins v. Plum, PBC, et al., currently pending in the United States District Court for the Eastern District of Louisiana, the Court has set the case for trial beginning on August ~~28, 2023.~~12, 2024. The parties ~~have agreed to ask the Court to move the trial date to no earlier than March 2024 and have started to engage~~are currently engaging in discovery.

•On January 9, 2023, Plaintiffs in P.A. ~~et al.~~ v. Hain Celestial Group, Inc., et al. filed their First Amended Complaint in the Circuit Court of the First Circuit, State of Hawai’i. On March 8, 2023, the Company filed its Answer to Plaintiff’s First Amended Complaint. The case is set for trial starting on January 23, 2025.

•On February 3, 2023, Plaintiff in Pourdanesh v. Hain Celestial Group, Inc. et al. filed his Complaint in the Superior Court for the State of California, County of Los Angeles. Plaintiff ~~served his Complaint on the Company on March 28, 2023. Following a meet and confer with Plaintiff’s counsel, Plaintiff has agreed to file~~filed an Amended Complaint ~~identifying~~on June 16, 2023. Defendants filed a Demurrer to the ~~products at issue.~~Amended Complaint on July 17, 2023, which was denied on October 5, 2023. The ~~case is stayed until~~parties have begun to engage in discovery.

•On July 25, 2023, Plaintiffs in DMP v. Beech-Nut Nutrition Company, Inc. et al., currently pending in the ~~Initial Status Conference on May 17, 2023.~~United States District Court for the District of Nevada, filed a Motion for Leave to Amend the Complaint. On October 24, 2023, the Court granted Plaintiffs’ Motion and Hain was added as a defendant to the case.

In September 2023, the two Nevada state court cases previously pending in Clark County District Court, Benitez v. Beech-Nut Nutrition Company, Inc., et al. and Buenaventura v. Beech-Nut Nutrition Company, Inc., were both voluntarily dismissed.

The Company denies that its Products led to any of the alleged injuries and will defend these cases vigorously. That said, additional lawsuits may be filed against the Company in the future, asserting similar or different legal theories and seeking similar or different types of damages and relief. Such lawsuits may be resolved in a manner adverse to us, and we may incur substantial costs or damages not covered by ~~our~~ insurance, which could have a material adverse effect on our financial condition and business.

Other

In addition to the litigation described above, the Company is and may be a defendant in lawsuits from time to time in the normal course of business.

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.

~~17. SEGMENT INFORMATION~~

Our organization structure consists of two geographic-based reportable segments: North America and International. Our North America reportable segment consists of the United States and Canada as operating segments. Our International reportable segment is comprised of three operating segments: United Kingdom, Ella’s Kitchen UK, and Europe. This structure is in line with how our Chief Operating Decision Maker, the Company's Chief Executive Officer, assesses our performance and allocates resources.

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17. SEGMENT INFORMATION

The Company’s organizational structure consists of two geographic based reportable segments: North America and International, which are also the operating segments. This structure is in line with how the Company’s Chief Operating Decision Maker (“CODM”) assesses the Company’s performance and allocates resources. The Company uses segment net sales and ~~operating income to evaluate performance and to allocate resources. The Company believes these measures are most relevant~~segment Adjusted EBITDA in order to analyze segment results and trends.

Segment ~~operating~~Adjusted EBITDA excludes: (benefit) provision for income ~~excludes~~taxes, net interest expense, depreciation and amortization, equity in net loss of equity-method investees, stock-based compensation, net, unrealized currency losses (gains), certain ~~general corporate~~litigation and related costs, plant closure related costs-net, productivity and transformation costs, warehouse and manufacturing consolidation and other costs, costs associated with acquisitions, divestitures and other transactions, loss (gain) on sale of assets, long-lived asset impairments and other adjustments. In addition, Segment Adjusted EBITDA does not include Corporate and Other expenses ~~(which~~related to the Company’s centralized administrative functions, which do not specifically relate to a reportable segment. Such Corporate and Other expenses are ~~a component~~comprised mainly of ~~selling, general~~compensation and ~~administrative expenses) and acquisition~~ related expenses ~~restructuring, integration,~~of certain of the Company’s senior executive officers and other ~~charges.~~employees who perform duties related to the entire enterprise, litigation expense and expenses for certain professional fees, facilities, and other items which benefit the Company as a whole.

The following tables set forth financial information about each of the Company’s reportable segments. Information about total assets by segment is not disclosed because such information is not reported to or used by the Company’s CODM for purposes of assessing segment performance or allocating resources. Transactions between reportable segments were insignificant for all periods presented.


		Three Months Ended March 31,				Nine Months Ended March 31,					Three Months Ended September 30,
		2023		2022		2023		2022			2023		2022
Net Sales:	Net Sales:									Net Sales:
North America	North America	$	286,649	$	325,742	$	857,406	$	866,281	North America	$	260,054	$	288,396
International	International	168,594		177,197		491,396		568,502		International	164,975		150,955
											$	425,029	$	439,351
		$	455,243	$	502,939	$	1,348,802	$	1,434,783
Adjusted EBITDA:										Adjusted EBITDA:
North America										North America	$	18,727	$	30,781
International										International	17,438		14,947
Total Reportable Segments Adjusted EBITDA										Total Reportable Segments Adjusted EBITDA	36,165		45,728
Corporate and Other										Corporate and Other	(12,075)		(9,699)
											24,090		36,029
Operating (Loss) Income:
North America(a)		$	(136,127)	$	28,526	$	(79,420)	$	72,530
International		13,604		18,303		33,219		69,740
Impairment charges										Impairment charges
		(122,523)		46,829		(46,201)		142,270
Corporate and Other(b)		(18,403)		(11,665)		(51,513)		(49,538)
Long-lived asset impairment										Long-lived asset impairment	(694)		—
Acquisitions, divestitures and other										Acquisitions, divestitures and other
Transaction and integration costs, net										Transaction and integration costs, net	(118)		(1,367)
(Loss) gain on sale of assets										(Loss) gain on sale of assets	(62)		40
		$	(140,926)	$	35,164	$	(97,714)	$	92,732
Restructuring activities										Restructuring activities

Plant closure related costs, net										Plant closure related costs, net	(1,841)		2
Productivity and transformation costs										Productivity and transformation costs	(6,403)		(773)

Litigation and related costs										Litigation and related costs	(1,524)		(2,463)
Depreciation and amortization										Depreciation and amortization	(12,305)		(11,970)
Equity in net loss of equity-method investees										Equity in net loss of equity-method investees	(498)		(382)
Interest expense, net										Interest expense, net	(12,623)		(7,279)
Benefit (provision) for income taxes										Benefit (provision) for income taxes	5,379		(2,631)
Stock-based compensation, net										Stock-based compensation, net	(3,742)		(3,994)
Unrealized currency (losses) gains										Unrealized currency (losses) gains	(35)		1,711
Net (loss) income										Net (loss) income	$	(10,376)	$	6,923

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

~~(b)~~ In addition to general Corporate and Other expenses as described above, for the three and nine months ended March 31, 2023, Corporate and Other included $2,603 and $3,133 of Productivity and transformation costs, respectively. For the three and nine months ended March 31, 2022, Corporate and Other included $218 and $3,228 of Productivity and transformation costs, respectively.

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


	Three Months Ended September 30,
	2023		2022
United States	$	230,659	$	259,508
United Kingdom	121,051		109,160
Europe	43,924		41,795
All Other	29,395		28,888
	$	425,029	$	439,351

Three Months Ended March 31, Nine Months Ended March 31,
2023 2022 2023 2022
United States $ 259,468 $ 295,152 $ 774,032 $ 772,548
United Kingdom 122,069 124,029 354,808 387,129
All Other 73,706 83,758 219,962 275,106
Total $ 455,243 $ 502,939 $ 1,348,802 $ 1,434,783

~~The~~There has been no material change to Company’s ~~long-lived~~total assets ~~which represent net property, plant and equipment and operating lease right-of-use assets, were as follows~~ by ~~geographic area:~~

March 31,
2023 June 30,
2022
United States $ 165,470 $ 182,038
United Kingdom 132,831 133,213
All Other 96,438 96,845
Total $ 394,739 $ 412,096
segment from the amount disclosed in the Form 10-K for the fiscal year ended June 30, 2023.

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Item 2. 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 ~~March 31,~~September 30, 2023 contained in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended June 30, ~~2022. Forward- looking~~2023. 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.

Overview

The Hain Celestial Group, Inc., a Delaware corporation (collectively, along with its subsidiaries, the “Company,” and herein referred to as “Hain Celestial,” “we,” “us” and “our”), was founded in ~~1993 and is headquartered in Boulder, Colorado. The Company’s mission has continued to evolve since its founding, with health and wellness being the core tenet.~~1993. The Company ~~continues to be~~is a leading manufacturer, marketer, ~~manufacturer~~ and seller of ~~organic and natural, “better-for-you” products by anticipating and exceeding consumer expectations in providing quality, innovation, value and convenience.~~better-for-you brands that inspire healthier living. The Company is committed to growing sustainably while continuing to implement environmentally sound business practices and manufacturing processes. Hain Celestial sells its products through specialty and natural food distributors, supermarkets, natural food stores, mass-market and e-commerce retailers, food service channels and club, drug and convenience stores worldwide.

The ~~Company manufactures, markets, distributes, and sells organic and natural products, providing consumers with the opportunity to lead A Healthier Way of Life~~®~~. The~~ Company’s food and beverage brands include Celestial Seasonings®, Clarks™, Cully & Sully®, Earth’s Best®, Ella’s Kitchen®, Frank Cooper’s®, Garden of Eatin’®, Garden Veggie™, Hartley’s®, Health Valley®, Imagine®, Joya®, Lima®, Linda McCartney’s® (under license), MaraNatha®, Natumi®, New Covent Garden Soup Co.®, ParmCrisps®, Robertson’s®, Rose’s® (under license), Sensible Portions®, Spectrum®, Sun-Pat®, Terra®, The Greek Gods®, Thinsters®, Yorkshire Provender® and Yves Veggie Cuisine®. The Company’s personal care brands include Alba Botanica®, Avalon Organics®, JASON®, Live Clean® and Queen Helene®.

~~Global Economic Environment~~Hain Reimagined Program

~~Economic conditions during fiscal year 2022 and~~During the first ~~nine months~~quarter of fiscal year ~~2023 have been marked by inflationary pressures, rising interest rates~~2024, we initiated a multi-year growth and ~~shifts~~transformation program (the “Hain Reimagined Program”) to drive shareholder returns. The savings initiatives are expected to impact our reportable segments and Corporate and Other. The program is intended to optimize our portfolio, improve underlying profitability and increase our flexibility to invest in ~~consumer demand.~~targeted growth initiatives, brand building and other capabilities critical to delivering future growth. Hain Reimagined is grounded on four strategic pillars:

•~~Inflation~~Focus

▪Concentrate our portfolio in five consumer-centric Better-For-You (“BFY”) platforms: Snacks, Baby & Kids, Beverages, Meal Preparation, and Personal Care.

▪Simplify our footprint, maintaining direct presence in five key markets – ~~The inflationary environment has led to higher costs for ingredients, packaging, energy, transportation~~United States, Canada, UK, Ireland, and ~~other supply chain components. We expect this higher cost environment to continue, although we expect these higher costs to be partially mitigated by pricing actions we have implemented to date~~Europe – and ~~further pricing actions that we may implement.~~align our global operating model and footprint, leveraging scale and realizing synergies across the business.

•~~Interest Rates~~Grow

▪ ~~– Loans under our credit agreement bear interest at a variable rate,~~Deliver share gain in key platforms where we have the most compelling right to win, through expanded channel reach and ~~the interest rate on our outstanding indebtedness has increased as market interest rates have risen significantly starting~~acceleration in the second half of fiscal year 2022. These higher interest rates, together with a higher outstanding debt balance, has led to an increase in our interest expense and we expect this high rate environment to continue.its innovation pipeline.

•~~Consumer Demand~~Build

▪ ~~– Recent economic conditions have resulted~~Enhance critical capabilities in ~~changes in consumer spending patterns, which has had an impact on our sales. During an economic downturn, factors~~brand building and effectiveness of marketing spend; expand reach across under-penetrated margin-accretive channels such as ~~increased unemployment, decreases~~away-from-home and omni-channel e-commerce; and enhance our innovation capability to be more leading edge in ~~disposable income~~BFY.

•Fuel

▪Drive revenue growth management, working capital management and ~~declines in consumer confidence can cause changes in consumer spending behavior. Economic conditions have prompted some consumers, particularly in Europe,~~operational efficiency to ~~shift to lower-priced products.~~fund growth and enhance margins.

~~Russia-Ukraine War~~Cumulative pretax charges are expected to be $115 million - $125 million inclusive of potential inventory reductions of approximately $25 million related to brand/category exits. 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. Annualized pretax savings are expected to be $130 million - $150 million.

Although we have no material assets in Russia, Belarus or Ukraine, our supply chain was adversely impacted by the Russia-Ukraine war during the second half of fiscal year 2022 and the first nine months of fiscal year 2023 and we continue to face other challenges and risks arising from the war. In particular, the war has added significant costs to existing inflationary pressures through increased energy and raw material prices. Further, beyond increased costs, labor challenges and other factors have led to supply chain disruptions. While, to date, we have been able to identify replacement raw materials where necessary, we have incurred increased costs in doing so. The war has also negatively impacted consumer sentiment, particularly in Europe, with some consumers shifting to lower-priced products, which has somewhat affected demand for our products. Additionally, we face increased cybersecurity risks, as companies based in the United States and its allied countries have become targets of malicious cyber activity. While we are continuing to monitor and manage the impacts of the war on our business, the extent to which the Russia-Ukraine war and the related economic impact may affect our financial condition or results of operations in the future remains uncertain.

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~~CEO Succession~~Global Economic Environment

~~On November 22, 2022,~~The duration and intensity of inflation fluctuations, the ~~Board~~possibility of ~~Directors (the "Board")~~an impending recession, alterations in consumer shopping and consumption patterns, and shifts in geopolitical events, such as the ongoing Russia-Ukraine conflict and the recent Gaza Strip conflict, may lead to increased supply chain expenses, higher inflation, and other business impacts. We continually assess the nature and extent of ~~the Company approved a succession plan pursuant to which the Board appointed Wendy P. Davidson to the role of President~~these potential and ~~Chief Executive Officer~~evolving impacts on our business, consolidated operational results, liquidity, and as a director on the Board, in each case effective as of January 1, 2023. As part of the succession plan, Mark L. Schiller transitioned from his position as President and Chief Executive Officer of the Company effective as of December 31, 2022 (the “Transition Date”). Mr. Schiller remains as a director on the Board following the Transition Date.

capital resources.

Comparison of Three Months Ended ~~March 31,~~September 30, 2023 to Three Months Ended ~~March 31,~~September 30, 2022

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 ~~March 31,~~September 30, 2023 and 2022 (amounts in thousands, other than per share data and percentages, which may not add due to rounding):


		Three Months Ended						Change in				Three Months Ended						Change in
		March 31, 2023			March 31, 2022			Dollars		Percentage		September 30, 2023			September 30, 2022			Dollars		Percentage
Net sales	Net sales	$	455,243	100.0%	$	502,939	100.0%	$	(47,696)	(9.5)%	Net sales	$	425,029	100.0%	$	439,351	100.0%	$	(14,322)	(3.3)%
Cost of sales	Cost of sales	357,764		78.6%	387,236		77.0%	(29,472)		(7.6)%	Cost of sales	341,086		80.3%	345,016		78.5%	(3,930)		(1.1)%
Gross profit	Gross profit	97,479		21.4%	115,703		23.0%	(18,224)		(15.8)%	Gross profit	83,943		19.7%	94,335		21.5%	(10,392)		(11.0)%
Selling, general and administrative expenses	Selling, general and administrative expenses	75,047		16.5%	75,750		15.1%	(703)		(0.9)%	Selling, general and administrative expenses	77,169		18.2%	74,951		17.1%	2,218		3.0%
Intangibles and long-lived asset impairment		156,583		34.4%	—		—%	156,583		*

Productivity and transformation costs											Productivity and transformation costs	6,403		1.5%	773		0.2%	5,630		728.3%
Amortization of acquired intangible assets	Amortization of acquired intangible assets	2,842		0.6%	3,110		0.6%	(268)		(8.6)%	Amortization of acquired intangible assets	1,955		0.5%	2,788		0.6%	(833)		(29.9)%
Productivity and transformation costs		3,933		0.9%	1,679		0.3%	2,254		134.2%

Long-lived asset impairment											Long-lived asset impairment	694		0.2%	—		—%	694		100.0%

Operating (loss) income	Operating (loss) income	(140,926)		(31.0)%	35,164		7.0%	(176,090)		(500.8)%	Operating (loss) income	(2,278)		(0.5)%	15,823		3.6%	(18,101)		*
Interest and other financing expense, net	Interest and other financing expense, net	13,421		2.9%	3,224		0.6%	10,197		316.3%	Interest and other financing expense, net	13,244		3.1%	7,677		1.7%	5,567		72.5%
Other expense (income), net		439		0.1%	(712)		(0.1)%	1,151		(161.7)%
(Loss) income before income taxes and equity in net loss of equity-method investees		(154,786)		(34.0)%	32,652		6.5%	(187,438)		(574.0)%
Other income, net											Other income, net	(265)		(0.1)%	(1,790)		(0.4)%	1,525		(85.2)%
(Loss) income from operations before income taxes and equity in net loss (income) of equity-method investees											(Loss) income from operations before income taxes and equity in net loss (income) of equity-method investees	(15,257)		(3.6)%	9,936		2.3%	(25,193)		*
(Benefit) provision for income taxes	(Benefit) provision for income taxes	(39,587)		(8.7)%	7,738		1.5%	(47,325)		(611.6)%	(Benefit) provision for income taxes	(5,379)		(1.3)%	2,631		0.6%	(8,010)		*
Equity in net loss of equity-method investees	Equity in net loss of equity-method investees	528		0.1%	383		0.1%	145		37.9%	Equity in net loss of equity-method investees	498		0.1%	382		0.1%	116		30.4%

Net (loss) income	Net (loss) income	$	(115,727)	(25.4)%	$	24,531	4.9%	$	(140,258)	(571.8)%	Net (loss) income	$	(10,376)	(2.4)%	$	6,923	1.6%	$	(17,299)	*

Adjusted EBITDA	Adjusted EBITDA	$	37,260	8.2%	$	58,669	11.7%	$	(21,409)	(36.5)%	Adjusted EBITDA	$	24,090	5.7%	$	36,029	8.2%	$	(11,939)	(33.1)%

Diluted net (loss) income per common share	Diluted net (loss) income per common share	$	(1.29)		$	0.27		$	(1.56)	*	Diluted net (loss) income per common share	$	(0.12)		$	0.08		$	(0.20)	*

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

Net Sales

Net sales for the three months ended ~~March 31,~~September 30, 2023 were ~~$455.2~~$425.0 million, a decrease of ~~$47.7~~$14.3 million, or ~~9.5%~~3.3%, as compared to ~~$502.9~~$439.4 million in the three months ended ~~March 31,~~September 30, 2022. ~~On a constant currency basis,~~Net sales, adjusted for the impact of ~~acquisitions,~~ divestitures and discontinued brands, ~~net sales~~ decreased approximately ~~$28.9~~$12.6 million, or ~~5.8%~~2.9%, from the prior year quarter ~~driven by both~~due to a decline in the North America ~~and~~reportable segment, partially offset by growth in the International reportable ~~segments.~~segment. Further details of changes in net sales by segment are provided below in the Segment Results section.

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Gross Profit

Gross profit for the three months ended ~~March 31,~~September 30, 2023 was ~~$97.5~~$83.9 million, a decrease of ~~$18.2~~$10.4 million, or ~~15.8%~~11.0%, as compared to the prior year quarter. Additionally, gross profit margin of ~~21.4%~~19.7% was lower when compared with ~~23.0%~~21.5% in the prior year quarter.

The decrease in gross profit was driven primarily by the North America reportable segment, mainly due to lower sales volume as ~~a result of lower net sales, changes in sales mix of high margin products~~well as by inflation, partially offset by pricing and ~~inflation.~~productivity. The International reportable segment ~~also~~ had ~~a decrease~~an increase in gross profit mainly ~~resulting from lower~~driven by higher net sales ~~in the Europe operating segment, change in sales mix of high margin products and higher energy and supply chain costs when compared~~due to ~~the prior year period.~~pricing, partially offset by inflation.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were ~~$75.0~~$77.2 million for the three months ended ~~March 31,~~September 30, 2023, ~~a decrease~~an increase of ~~$0.7~~$2.2 million, or ~~0.9%~~3.0%, from ~~$75.8~~$75.0 million for the prior year quarter. The ~~decrease~~increase was ~~driven by lower marketing costs as well as efficiencies gained from the Company's productivity and transformation initiatives, partially offset by higher labor-related expenses primarily in Corporate.~~

~~Intangibles and long-lived asset impairment~~

~~During the three months ended March 31, 2023, the Company recognized an aggregate impairment charge of $156.6 million, primarily related to the ParmCrisps~~® ~~and Thinsters~~® ~~indefinite-lived trademarks and ParmCrisps~~® definite-lived customer relationships, which reduced the carrying value of such assets to their estimated fair value. The fair value of indefinite-lived trademarks and definite-lived customer relationships were determined using the relief from royalty method and multi-period excess earnings method, respectively. See Note 8, ~~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.~~

~~Amortization of Acquired Intangible Assets~~

~~Amortization of acquired intangibles was $2.8 million for the three months ended March 31, 2023, a decrease of $0.3 million from $3.1 million in the prior year quarter~~ due to ~~complete amortization of certain acquired intangible assets primarily in the Europe~~higher selling expenses and ~~the United Kingdom operating segments when compared with the prior year quarter.~~employee-related expenses.

Productivity and Transformation Costs

Productivity and transformation costs were ~~$3.9~~$6.4 million for the three months ended ~~March 31,~~September 30, 2023, an increase of ~~$2.3~~$5.6 million from ~~$1.7~~$0.8 million in the prior year quarter. The increase was primarily due to ~~increased spending~~restructuring costs incurred in connection with the Hain Reimagined Program.

Amortization of Acquired Intangible Assets

Amortization of acquired intangibles was $2.0 million for the three months ended September 30, 2023, a decrease of $0.8 million from $2.8 million in the prior year quarter, primarily reflecting reduced amortization expenses due to impairment of the ParmCrisps customer relationships recognized in the third quarter of fiscal 2023. See Note 8, Goodwill and Other Intangible Assets, in the Notes to the Consolidated Financial Statements included in Item 8 of the Form 10-K.

Long-Lived Asset Impairment

During the three months ended September 30, 2023, the Company recognized a non-cash impairment charge of $0.7 million related to ~~productivity and transformation strategy consulting costs as a part of the Company’s strategic plan update.~~certain equipment in North America.

Operating ~~Loss (Income)~~(Loss) Income

Operating loss for the three months ended ~~March 31,~~September 30, 2023 was ~~$140.9~~$2.3 million compared to operating income of ~~$35.2~~$15.8 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 ~~$13.4~~$13.2 million for the three months ended ~~March 31,~~September 30, 2023, an increase of ~~$10.2~~$5.6 million, or ~~316.3%~~72.5%, from ~~$3.2~~$7.7 million in the prior year quarter. The increase resulted primarily ~~from rising interest~~due to higher borrowing rates, ~~and a higher~~partially offset by lower outstanding debt balance ~~driven primarily by~~compared to the ~~acquisition of THWR and share repurchase activity during fiscal 2022.~~prior year quarter. See Note 9,8, 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),~~Income, Net

Other ~~expense,~~income, net totaled ~~$0.4~~$0.3 million for the three months ended ~~March 31,~~September 30, 2023, compared to ~~income of $0.7~~$1.8 million in the prior year quarter. The decrease ~~in income~~ was primarily attributable to ~~the recognition of~~lower unrealized foreign ~~exchange gain in the prior year quarter compared to foreign exchange loss in the current quarter.~~currency gains.

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(Loss) Income from Operations Before Income Taxes and Equity in Net Loss of Equity-Method Investees

Loss from operations before income taxes and equity in net loss of our equity-method investees for the three months ended ~~March 31,~~September 30, 2023 was ~~$154.8~~$15.3 million compared to income of ~~$32.7~~$9.9 million in the prior year quarter. The decrease was due to the items discussed above.

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(Benefit) Provision for Income Taxes

The (benefit) provision for income taxes includes federal, foreign, state and local income taxes. Our income tax benefit was ~~$39.6~~$5.4 million for the three months ended ~~March 31,~~September 30, 2023 compared to ~~income tax~~ expense of ~~$7.7~~$2.6 million in the prior year quarter.

The effective income tax rate was a benefit of ~~25.6%~~35.3% and an expense of ~~23.7%~~26.5% for the three months ended ~~March 31,~~September 30, 2023 and 2022, respectively. The effective income tax rate for the three months ended ~~March 31,~~September 30, 2023 ~~was impacted by ParmCrisps~~® ~~and Thinsters~~® ~~trademarks and ParmCrisps~~® ~~asset group impairment charges, stock-based compensation and changes in uncertain~~increased due to tax ~~positions. The effective income tax rate for the three months ended March 31, 2022 was impacted by deductions~~expense related to stock-based compensation, global intangible low-taxed income (“GILTI”), and limitations on the ~~finalization~~deductibility of ~~fiscal year 2021 income tax returns.~~executive compensation. The effective income tax rates in each period were also impacted by the geographical mix of earnings and state income taxes.

Equity in Net Loss of Equity-Method Investees

Our equity in net loss from our equity-method investments for the three months ended ~~March 31,~~September 30, 2023 was a loss of $0.5 million ~~and~~compared to $0.4 million in the prior year quarter. See Note ~~13,~~12, Investments, in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Net (Loss) Income

Net loss for the three months ended ~~March 31,~~September 30, 2023 was ~~$115.7~~$10.4 million, or ~~$1.29~~$0.12 per diluted share, compared to net income of ~~$24.5~~$6.9 million, or ~~$0.27~~$0.08 per diluted share, in the prior year quarter. The ~~change~~decrease was attributable to the factors noted above.

Adjusted EBITDA

Our Adjusted EBITDA was ~~$37.3~~$24.1 million and ~~$58.7~~$36.0 million for the three months ended ~~March 31, 2023 and 2022, respectively, as a result of the factors discussed above, and the adjustments described in the~~ ~~Reconciliation of Non-U.S. GAAP Financial Measures to U.S. GAAP Measures~~ presented following the discussion of our results of operations. On a constant currency basis, Adjusted EBITDA decreased by $19.3 million, or 33.0%, from $58.7 million for the three months ended March 31, 2022 to $39.3 million for the three months ended March 31, 2023.

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~~Segment Results~~

~~The following table provides a summary of net sales and operating income (loss) by reportable segment for the three months ended March 31, 2023 and 2022:~~

(dollars in thousands) North America International Corporate and Other Consolidated
Net sales
Three months ended 3/31/23 $ 286,649 $ 168,594 $ — $ 455,243
Three months ended 3/31/22 325,742 177,197 — 502,939
$ change $ (39,093) $ (8,603) n/a $ (47,696)
% change (12.0) % (4.9) % n/a (9.5) %
Operating (loss) income
Three months ended 3/31/23(a)
$ (136,127) $ 13,604 $ (18,403) $ (140,926)
Three months ended 3/31/22 28,526 18,303 (11,665) 35,164
$ change $ (164,653) $ (4,699) $ (6,738) $ (176,090)
% change (577.2) % (25.7) % 57.8 % (500.8) %
Operating (loss) income margin
Three months ended 3/31/23 (47.5) % 8.1 % n/a (31.0) %
Three months ended 3/31/22 8.8 % 10.3 % n/a 7.0 %

~~(a)~~ ~~North America operating loss includes non-cash impairment charges of $156,298 related to ParmCrisps~~® ~~and Thinsters~~® ~~trademarks and ParmCrisps~~® ~~customer relationships (see Note 8, Goodwill and Other Intangible Assets).~~

~~North America~~

Our net sales in the North America reportable segment for the three months ended March 31, 2023 were $286.6 million, a decrease of $39.1 million, or 12.0%, from net sales of $325.7 million in the prior year quarter. On a constant currency basis, adjusted for the impact of acquisitions, divestitures and discontinued brands, net sales decreased by 10.8%. In the United States operating segment, adjusted sales were lower compared to the prior year quarter mainly due to lower sales in snacks, personal care and tea, partially offset by higher sales in yogurt. The net sales decrease within snacks was substantially driven by reduced distribution and customer promotions associated with the ParmCrisps® brand. Similar trends were noted in the Canada operating segment. Operating loss in North America for the three months ended March 31, 2023 was $136.1 million, a decrease of $164.7 million compared to operating income of $28.5 million in the prior year quarter. The decrease was mainly driven by aggregate non-cash impairment charges of $156.3 million related to the ParmCrisps® ~~and Thinsters~~® ~~intangible assets and lower net sales in the United States operating segment, partially offset by cost improvements due to higher productivity.~~

~~International~~

Our net sales in the International reportable segment for the three months ended March 31, 2023 were $168.6 million, a decrease of $8.6 million, or 4.9%, from net sales of $177.2 million in the prior year quarter. On a constant currency basis, net sales increased 3.5% from the prior year quarter primarily due to an increase in sales in the United Kingdom operating segment, partially offset by softness in plant-based categories in the rest of Europe. Operating income in our International reportable segment for the three months ended March 31, 2023 was $13.6 million, a decrease of $4.7 million from $18.3 million for the three months ended March 31, 2022. Operating income was lower in the current quarter when compared to the prior year quarter mainly due to increased energy and input costs and volume mix, partially offset by improved pricing and productivity.

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~~Corporate and Other~~

Our Corporate and Other category consists of expenses related to the Company’s centralized administrative functions, which do not specifically relate to an operating 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 our entire enterprise as well as expenses for certain professional fees, acquisition and divestiture transaction costs, facilities, and other items which benefit the Company as a whole. Our operating loss in Corporate and Other for the three months ended March 31, 2023 was $18.4 million, an increase of $6.7 million, from $11.7 million for the three months ended March 31, 2022. This change was primarily due to higher strategic consulting charges and employee related expenses.

~~Refer to Note 17,~~ ~~Segment Information, in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.~~

~~Comparison of Nine Months Ended March 31, 2023 to Nine Months Ended March 31, 2022~~

~~Consolidated Results~~

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, 2023 and 2022 (amounts in thousands, other than per share data and percentages, which may not add due to rounding):

Nine Months Ended Change in
March 31, 2023 March 31, 2022 Dollars Percentage
Net sales $ 1,348,802 100.0% $ 1,434,783 100.0% $ (85,981) (6.0)%
Cost of sales 1,053,131 78.1% 1,096,367 76.4% (43,236) (3.9)%
Gross profit 295,671 21.9% 338,416 23.6% (42,745) (12.6)%
Selling, general and administrative expenses 222,355 16.5% 229,679 16.0% (7,324) (3.2)%
Intangibles and long-lived asset impairment 156,923 11.6% 303 —% 156,620 **
Amortization of acquired intangible assets 8,415 0.6% 7,254 0.5% 1,161 16.0%
Productivity and transformation costs 5,692 0.4% 8,448 0.6% (2,756) (32.6)%
Operating (loss) income (97,714) (7.2)% 92,732 6.5% (190,446) *
Interest and other financing expense, net 31,910 2.4% 7,672 0.5% 24,238 315.9%
Other income, net (2,413) (0.2)% (10,570) (0.7)% 8,157 (77.2)%
(Loss) income before income taxes and equity in net loss of equity-method investees (127,211) (9.4)% 95,630 6.7% (222,841) *
(Benefit) provision for income taxes (30,599) (2.3)% 19,425 1.4% (50,024) *
Equity in net loss of equity-method investees 1,226 0.1% 1,374 0.1% (148) (10.8)%
Net (loss) income $ (97,838) (7.3)% $ 74,831 5.2% $ (172,669) *
Adjusted EBITDA $ 123,106 9.1% $ 165,249 11.5% $ (42,143) (25.5)%
Diluted net (loss) income per common share $ (1.09) $ 0.79 $ (1.88) *

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

** Percentage is not meaningful due to significantly lower number in the comparative period

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~~Net Sales~~

Net sales for the nine months ended March 31, 2023 were $1,348.8 million, a decrease of $86.0 million, or 6.0%, as compared to $1,434.8 million in the nine months ended March 31, 2022. On a constant currency basis, adjusted for the impact of acquisitions, divestitures and discontinued brands, net sales decreased approximately $44.2 million, or 3.1%, from the prior comparable period primarily driven by International reportable segment. Further details of changes in net sales by segment are provided below in the ~~Segment Results~~ ~~section.~~

~~Gross Profit~~

Gross profit for the nine months ended March 31, 2023 was $295.7 million, a decrease of $42.7 million, or 12.6%, as compared to the prior year comparable period. Gross profit margin was 21.9% of net sales, compared to 23.6% in the prior year comparable period. The decrease in gross profit was driven primarily by the International reportable segment mainly due to lower net sales in the Europe and United Kingdom operating segments and higher energy and supply chain costs when compared to the prior year period. The North America reportable segment gross profit remained relatively flat due to pricing increases and cost improvements driven by higher productivity, partially offset by inflation and lower net sales in the Canada operating segment when compared with the prior year comparable period.

~~Selling, General and Administrative Expenses~~

Selling, general and administrative expenses were $222.4 million for the nine months ended March 31, 2023, a decrease of $7.3 million, or 3.2%, from $229.7 million for the prior year comparable period. The decrease was primarily driven by reductions in the United States and the United Kingdom operating segments. The decrease reflected reduced broker fees and sales related expenses primarily in the United States operating segment and lower marketing costs, as well as efficiencies gained from the Company's productivity and transformation initiatives.

~~Intangibles and long-lived asset impairment~~

During the nine months ended March 31, 2023, the Company recognized aggregate impairment charge of $156.9 million , an increase of $156.6 million from $0.3 million in the prior year comparable period, related to the ParmCrisps® ~~and Thinsters~~® ~~indefinite-lived trademarks and ParmCrisps~~® definite-lived customer relationships, which reduced the carrying value of such assets to their estimated fair value. The fair value of indefinite-lived trademarks and definite-lived customer relationships were determined using the relief from royalty method and multi-period excess earnings method, respectively. See Note 8, ~~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.~~

~~Amortization of Acquired Intangible Assets~~

Amortization of acquired intangibles was $8.4 million for the nine months ended March 31, 2023, an increase of $1.2 million from $7.3 million in the prior year comparable period due to the acquisition of THWR in the second quarter of the prior fiscal year.

~~Productivity and Transformation Costs~~

Productivity and transformation costs were $5.7 million for the nine months ended March 31, 2023, a decrease of $2.8 million from $8.4 million in the prior year comparable period. The decrease was primarily due to wind down of prior year restructuring costs partially offset by new spending on our strategic plan update.

~~Operating (Loss) Income~~

~~Operating loss for the nine months ended March 31, 2023 was $97.7 million compared to income of $92.7 million in the prior year comparable period as a result of the items described above.~~

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~~Interest and Other Financing Expense, Net~~

Interest and other financing expense, net totaled $31.9 million for the nine months ended March 31, 2023, an increase of $24.2 million, or 315.9%, from $7.7 million in the prior year comparable period. The increase resulted primarily from a higher outstanding debt balance driven primarily by the acquisition of THWR in the second quarter of the prior fiscal year as well as share repurchase activity during fiscal 2022. Interest and other financing expense was also impacted by higher interest rates compared to the prior comparable period. See Note 9, ~~Debt and Borrowings, in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.~~

~~Other Income, Net~~

Other income, net totaled $2.4 million for the nine months ended March 31, 2023, compared to $10.6 million in the prior year comparable period. The decrease in income was primarily attributable to the recognition of an $8.7 million gain on sale of assets in the prior year period related to the sale of undeveloped land plots in Boulder, Colorado.

~~(Loss) Income 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 nine months ended March 31, 2023 was $127.2 million compared to income of $95.6 million in the prior year comparable period. The decrease was due to the items discussed above.

~~(Benefit) Provision for Income Taxes~~

The provision for income taxes includes federal, foreign, state and local income taxes. Our income tax benefit was $30.6 million for the nine months ended March 31, 2023 compared to expense of $19.4 million in the prior year comparable period. The effective income tax rate was a benefit of 24.1% and expense of 20.3% for the nine months ended March 31, 2023 and 2022, respectively.

~~The effective income tax rate for the nine months ended March 31, 2023 was impacted by ParmCrisps~~® ~~and Thinsters~~® ~~trademarks and ParmCrisps~~® ~~asset group impairment charges, gain on the sale of Westbrae (See Note 4,~~ ~~Acquisition and Disposition~~, in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q), an operating lease modification during the second quarter, severance with respect to our former CEO (as part of the limitation on the deductibility of executive compensation), stock-based compensation and changes in uncertain tax positions. The effective income tax rate for the nine months ended March 31, 2022 was impacted by the reversal of uncertain tax position accruals based on filing and approval of certain elections by taxing authorities, deductions related to stock-based compensation, non-deductible transaction costs related to acquisition of THWR, the reversal of a valuation allowance due to the utilization of a capital loss carryover, and the finalization of fiscal year 2021 U.S. income tax returns. The effective income tax rates in each period were also impacted by the geographical mix of earnings and state income taxes.

~~Equity in Net Loss of Equity-Method Investees~~

~~Our equity in net loss from our equity-method investments for the nine months ended March 31, 2023 was $1.2 million compared to $1.4 million in the prior year comparable period. See Note 13,~~ ~~Investments, in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.~~

~~Net (Loss) Income~~

Net loss for the nine months ended March 31, 2023 was $97.8 million, or $(1.09) per diluted share, compared to income of $74.8 million, or $0.79 per diluted share, in the prior year comparable period. The change was attributable to the factors noted above.

~~Adjusted EBITDA~~

~~Our Adjusted EBITDA was $123.1 million and $165.2 million for the nine months ended March 31,~~September 30, 2023 and 2022, respectively, as a result of the factors discussed above and the adjustments described in the Reconciliation of Non-U.S. GAAP Financial Measures to U.S. GAAP Measures presented following the discussion of our results of operations. On a constant currency basis, Adjusted EBITDA decreased by $34.5 million, or 20.9%, from $165.2 million for the nine months ended March 31, 2022 to $130.7 million for the nine months ended March 31, 2023.

Segment Results

Our organizational structure consists of two geographic based reportable segments: North America and International, which are also the operating segments. This structure is in line with how the Company’s Chief Operating Decision Maker (“CODM”) assesses the Company’s performance and allocates resources. The Company uses segment net sales and segment Adjusted EBITDA in order to analyze segment results and trends.

Segment Adjusted EBITDA excludes: net interest expense, (benefit) provision for income taxes, depreciation and amortization, equity in net loss of equity-method investees, stock-based compensation, net, unrealized currency losses (gains), certain litigation and related costs, plant closure related costs-net, productivity and transformation costs, warehouse and manufacturing consolidation and other costs, costs associated with divestitures and other transactions, loss (gain) on sale of assets, long-lived asset impairments and other adjustments. In addition, Segment Adjusted EBITDA does not include Corporate and Other expenses related to the Company’s centralized administrative functions, which do not specifically relate to a reportable segment. Such Corporate and Other expenses are comprised mainly of compensation and related expenses of certain of the Company’s senior executive officers and other employees who perform duties related to our entire enterprise, litigation expense and expenses for certain professional fees, facilities, and other items which benefit the Company as a whole. We do not allocate amounts below operating (loss) income to our reportable segments.

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~~Segment Results~~

The following table provides a summary of net sales and ~~operating income~~Adjusted EBITDA by reportable segment for the ~~nine~~three months ended ~~March 31,~~September 30, 2023 and 2022:


(dollars in thousands)	North America			International			Corporate and Other			Consolidated
Net sales
Three months ended 9/30/23	$	260,054		$	164,975		$	—		$	425,029
Three months ended 9/30/22	288,396			150,955			—			439,351
$ change	$	(28,342)		$	14,020		n/a			$	(14,322)
% change	(9.8)		%	9.3		%	n/a			(3.3)		%

Adjusted EBITDA
Three months ended 9/30/23	$	18,727		$	17,438		$	(12,075)		$	24,090
Three months ended 9/30/22	30,781			14,947			(9,699)			36,029
$ change	$	(12,054)		$	2,491		$	(2,376)		$	(11,939)
% change	(39.2)		%	16.7		%	24.5		%	(33.1)		%






Adjusted EBITDA margin
Three months ended 9/30/23	7.2		%	10.6		%	n/a			5.7		%
Three months ended 9/30/22	10.7		%	9.9		%	n/a			8.2		%

(dollars in thousands) North America International Corporate and Other Consolidated
Net sales
Nine months ended 3/31/23 $ 857,406 $ 491,396 $ — $ 1,348,802
Nine months ended 3/31/22 866,281 568,502 — 1,434,783
$ change $ (8,875) $ (77,106) n/a $ (85,981)
% change (1.0) % (13.6) % n/a (6.0) %
Operating (loss) income
Nine months ended 3/31/23(a)
$ (79,420) $ 33,219 $ (51,513) $ (97,714)
Nine months ended 3/31/22 72,530 69,740 (49,538) 92,732
$ change $ (151,950) $ (36,521) $ (1,975) $ (190,446)
% change (209.5) % (52.4) % 4.0 % (205.4) %
Operating (loss) income margin
Nine months ended 3/31/23 (9.3) % 6.8 % n/a (7.2) %
Nine months ended 3/31/22 8.4 % 12.3 % n/a 6.5 %

~~(a)~~See the Reconciliation of Non-U.S. GAAP Financial Measures to U.S. GAAP Measures ~~North America operating loss includes non-cash impairment charges~~following the discussion of ~~$156,298 related~~our results of operations and Note 17, Segment Information, in the Notes to ~~ParmCrisps~~® ~~and Thinsters~~® ~~trademarks and ParmCrisps~~® ~~customer relationships (see Note 8, Goodwill and Other Intangible Assets).~~the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q for a reconciliation of segment Adjusted EBITDA.

North America

Our net sales in the North America reportable segment for the ~~nine~~three months ended ~~March 31,~~September 30, 2023 were ~~$857.4~~$260.1 million, a decrease of ~~$8.9~~$28.3 million, or ~~1.0%~~9.8%, from net sales of ~~$866.3~~$288.4 million in the prior year ~~comparable period. On a constant currency basis, adjusted for the impact of acquisitions, divestitures and discontinued brands,~~quarter. The decrease in net sales ~~decreased by 3.7% due to decreased sales in the Canada operating segment~~was primarily due to lower sales in baby/kids category on account of continued industry-wide challenges in organic formula supply, as well as by a decline in personal care ~~product categories~~primarily reflecting the timing shift of a sun care program and ~~reduced club distribution and programming~~a decline in snacks associated with the optimization of promotional activity for ~~certain brands, partially offset by increased sales in the United States operating segment due to stronger sales in snacks. Operating loss in North America~~Terra®.

Adjusted EBITDA for the ~~nine~~three months ended ~~March 31,~~September 30, 2023 was ~~$79.4~~$18.7 million, ~~compared to operating income~~a decrease of ~~$72.5~~$12.1 million, or 39.2%, from Adjusted EBITDA of $30.8 million in the prior year ~~comparable period.~~quarter. The decrease was ~~mainly~~primarily driven by ~~ParmCrisps~~® reduced gross profit reflecting inflation as well as by lower sales discussed above and ~~Thinsters~~® ~~indefinite-lived trademarks and ParmCrisps~~® ~~definite-lived customer relationships impairment charges and lower net sales~~an increase in certain inventory obsolescence reserves. Adjusted EBITDA margin was 7.2%, a 350-basis point decrease from the ~~Canada operating segment, partially offset by cost improvements due to higher productivity.~~prior year period.

International

~~Our net~~Net sales in the International reportable segment for the ~~nine~~three months ended ~~March 31,~~September 30, 2023 were ~~$491.4~~$165.0 million, ~~a decrease~~an increase of ~~$77.1~~$14.0 million, or ~~13.6%~~9.3%, from net sales of ~~$568.5~~$151.0 million in the prior year ~~comparable period. On a constant currency basis,~~quarter. The increase in net sales ~~decreased 2.3%~~was mainly driven by growth in meal preparation and beverages categories.

Adjusted EBITDA for the three months ended September 30, 2023 was $17.4 million, an increase of $2.5 million, or 16.7%, from Adjusted EBITDA of $14.9 million in the prior year quarter. The increase was primarily driven by an increase in gross profit reflecting higher pricing, partially offset by the above-noted increase in selling, general and administrative expenses. Adjusted EBITDA margin was 10.6%, a 70-basis point increase from the prior year comparable period mainly due to lower sales in the Europe and United Kingdom operating segments, particularly in relation to plant-based categories and snacks, and the impact of the loss of a large non-dairy co-manufacturing customer in the second half of the prior fiscal year. Operating income in our International reportable segment for the nine months ended March 31, 2023 was $33.2 million, a decrease of $36.5 million from $69.7 million for the nine months ended March 31, 2022. Operating income was lower in the current period when compared to the prior year comparable period mainly due to lower gross profit resulting from a decline in sales and higher energy and supply chain costs, partially offset by lower delivery and warehouse costs due to improved utilization of warehouse space and efficiencies.period.

Corporate and Other

~~Our operating loss~~The increase in Corporate and Other ~~for the nine months ended March 31, 2023 was $51.5 million,~~expenses primarily reflected an increase ~~of $2.0 million, from $49.5 million~~ in ~~the prior year period. This change was primarily due to higher general and administrative expenses mainly related to increased salaries, wages, and benefits.~~

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consulting charges.

Refer to Note 17, 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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Liquidity and Capital Resources

We finance our operations and growth primarily with the cash flows we generate from our operations and from borrowings available to us under our Credit Agreement (as defined below). We believe that our cash flows from operations and borrowing capacity under our Credit Agreement ~~(as defined below)~~ will be adequate to meet anticipated operating and other expenditures for the foreseeable future.

See Note 8,

~~Amended~~Debt and ~~Restated Credit Agreement~~

Borrowings

On December 22, 2021, the Company refinanced its revolving credit facility by entering into a Fourth Amended and Restated Credit Agreement (as amended by a First Amendment dated December 16, 2022, the “Credit Agreement”). The Credit Agreement provides for senior secured financing of $1,100.0 million, in the ~~aggregate, consisting~~Notes to the Consolidated Financial Statements included in Part I, Item 1 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 is comprised of a $440.0 million U.S. revolving credit facility and $360.0 million global revolving credit facility) (the “Revolver”). Both the Revolver and the Term Loans mature on December 22, 2026.

The Credit Agreement includes financial covenants that require compliance with a consolidated interest coverage ratio, a consolidated leverage ratio and a consolidated secured leverage ratio. The minimum consolidated interest coverage ratio is 2.75:1.00. The maximum consolidated leverage ratio is 6.00:1.00. Through December 31, 2023 or such earlier date as elected by the Company (the “Amendment Period”), the maximum consolidated secured leverage ratio is 5.00:1.00. Following the Amendment Period, the maximum consolidated secured leverage ratio will be 4.25:1.00, subject to possible temporary increase following certain corporate acquisitions.

During the Amendment Period, loans under the Credit Agreement will bear interest at (a) the Secured Overnight Financing Rate, plus a credit spread adjustment of 0.10% (as adjusted, “Term SOFR”) plus 2.0% per annum or (b) the Base Rate (as defined in the Credit Agreement) plus 1.0% per annum. Following the Amendment Period, loans will bear interest at rates based on (a) Term SOFR plus a rate ranging from 0.875% to 1.750% per annum or (b) the Base Rate plus a rate ranging from 0.00% to 0.750% per annum, the relevant rate in each case being the Applicable Rate. The Applicable Rate following the Amendment Period will be determined in accordance with a leverage-based pricing grid, as set forth in the Credit Agreement. The weighted average interest rate on outstanding borrowings under the Credit Agreement at March 31, 2023 was 5.90%. Additionally, the Credit Agreement contains a Commitment Fee (as defined in the Credit Agreement) on the amount unused under the Credit Agreement ranging from 0.15% to 0.25% per annum, and such Commitment Fee is determined in accordance with a leverage-based pricing grid.

~~As of March 31, 2023, there were$567.0~~ ~~million of loans under the Revolver, $290.6 million of Term Loans,~~ ~~and~~ ~~$4.1 million~~ ~~let~~ters of credit outstanding under the Credit Agreement. As of March 31, 2023, $228.9 million was available under the Credit Agreement, subject to compliance with the financial covenants, as compared to $204.0 million as of June 30, 2022. As of March 31, 2023, the Company was in compliance with all associated covenants.this Form 10-Q.

In addition to obligations under the Credit Agreement, we are party to other contractual obligations involving commitments to make payments to third parties, including purchase commitments and lease obligations, which impact our short-term and long-term liquidity and capital resource needs. See Note 7,6, 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 by a First Amendment dated December 16, 2022, the “Credit Agreement”). The Credit Agreement provides for senior secured financing of $1,100 million in the aggregate, consisting of (1) $300 million in aggregate principal amount of term loans (the “Term Loans”) and (2) an $800 million senior secured revolving credit facility (which includes borrowing capacity available for letters of credit, and is comprised of a $440 million U.S. revolving credit facility and $360 million global revolving credit facility) (the “Revolver”). Both the Revolver and the Term Loans mature on December 22, 2026.

During the Second Amendment Period, loans under the Credit Agreement will bear interest at (a) Term SOFR plus 2.5% per annum or (b) the Base Rate plus 1.5% per annum. Following the Second Amendment Period, Loans will bear interest at rates based on (a) Term SOFR plus a rate ranging from 1.125% to 2.0% per annum or (b) the Base Rate plus a rate ranging from 0.125% to 1.0% per annum, the relevant rate in each case being the Applicable Rate. The Applicable Rate following the Second Amendment Period will be determined in accordance with a leverage-based pricing grid, as set forth in the Credit Agreement as amended by the Second Amendment. The weighted average interest rate on outstanding borrowings under the Credit Agreement at September 30, 2023 was 7.86%. Additionally, the Credit Agreement contains a Commitment Fee (as defined in the Credit Agreement) on the amount unused under the Credit Agreement ranging from 0.15% to 0.25% per annum, and such Commitment Fee is determined in accordance with a leverage-based pricing grid.

The Credit Agreement includes financial covenants that require compliance with a consolidated interest coverage ratio, a consolidated leverage ratio and a consolidated secured leverage ratio. Pursuant to the Second Amendment, the Company’s maximum consolidated secured leverage ratio was amended to be 5.00:1.00 until September 30, 2023, 5.25:1.00 until December 31, 2023 and 5.00:1.00 until December 31, 2024 (the period of time during which such maximum consolidated secured leverage ratios are in effect, the “Second Amendment Period,” which the Company may elect to end early). Following the Second Amendment Period, the maximum consolidated secured leverage ratio will be 4.25:1.00, subject to possible temporary increase following certain corporate acquisitions. Pursuant to the Second Amendment, the Company’s minimum interest coverage ratio was amended to be 2.50:1.00.

As of September 30, 2023, there were $530,000 of loans under the Revolver, $286,875 of Term Loans, and $4,468 of letters of credit outstanding under the Credit Agreement. As of September 30, 2023, $265,532 was available under the Credit Agreement, subject to compliance with the financial covenants. As of September 30, 2023, the Company was in compliance with all associated covenants.

Our cash and cash equivalents balance decreased ~~$21.8~~$15.1 million at ~~March 31,~~September 30, 2023 to ~~$43.7~~$38.3 million as compared to ~~$65.5~~$53.4 million at June 30, ~~2022.~~2023. Our working capital was ~~$348.1~~$319.2 million at ~~March 31,~~September 30, 2023, ~~an increase~~a decrease of ~~$19.1~~$39.8 million from ~~$329.0~~$358.9 million at the end of fiscal ~~2022.~~2023. Additionally, our total debt decreased by ~~$32.1~~$13.8 million at ~~March 31,~~September 30, 2023 to ~~$856.6~~$815.0 million as compared to ~~$888.6~~$828.7 million at June 30, ~~2022~~2023 as a result of ~~$31.6~~$12.9 million of net repayments carried out during the period.

Our cash balances are held in the United States, United Kingdom, Canada, Europe, the Middle East and India. As of ~~March 31,~~September 30, 2023, substantially all cash was held outside of the United States.

4435

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We maintain our cash and cash equivalents primarily in money market funds or their equivalent. Accordingly, we do not believe that our investments have significant exposure to interest rate risk. Cash provided by (used in) ~~provided by~~ operating, investing and financing activities is summarized below.


		Nine Months Ended March 31,				Change in		Three Months Ended September 30,				Change in
(amounts in thousands)	(amounts in thousands)	2023		2022		Dollars			(amounts in thousands)	2023		2022		Dollars
Cash flows provided by (used in):	Cash flows provided by (used in):								Cash flows provided by (used in):
Operating activities	Operating activities	$	26,309	$	99,186	$	(72,877)		Operating activities	$	14,030	$	(5,116)	$	19,146
Investing activities	Investing activities	(13,243)		(284,271)		271,028			Investing activities	(5,649)		(6,928)		1,279
Financing activities	Financing activities	(34,792)		172,858		(207,650)			Financing activities	(17,584)		9,824		(27,408)
Effect of exchange rate changes on cash		(104)		(5,836)		5,732
Decrease in cash and cash equivalents									Decrease in cash and cash equivalents	(9,203)		(2,220)		(6,983)
Effect of exchange rate changes on cash and cash equivalents									Effect of exchange rate changes on cash and cash equivalents	(5,881)		(11,498)		5,617

Net decrease in cash and cash equivalents	Net decrease in cash and cash equivalents	$	(21,830)	$	(18,063)	$	(3,767)		Net decrease in cash and cash equivalents	$	(15,084)	$	(13,718)	$	(1,366)

Cash provided by operating activities was ~~$26.3~~$14.0 million for the ~~nine~~three months ended ~~March 31,~~September 30, 2023, ~~a decrease~~an increase of ~~$72.9~~$19.1 million from cash ~~provided by~~used in operating activities of ~~$99.2~~$5.1 million in the prior year period. This ~~decrease~~increase versus the prior year period resulted primarily from ahigher cash generation of $44.3 million from our working capital accounts which was mainly due to our accounts payable optimization initiatives, focused inventory management, and an improvement in accounts receivable recovery, partially offset by reduction of ~~$60.5~~$25.2 million in net income adjusted for non-cash charges in the current period and higher cash utilization of $12.3 million from our working capital accounts primarily due to a higher account receivable balance due to timing of cash receipts, partially offset by a reduction in the change in other current assets.period.

Cash used in investing activities was ~~$13.2~~$5.6 million for the ~~nine~~three months ended ~~March 31,~~September 30, 2023, a decrease of ~~$271.0~~$1.3 million from ~~$284.3~~$6.9 million in the prior year period primarily due to ~~the acquisition of THWR~~lower capital expenditures in the ~~same~~current period due to phasing of capital projects. During the ~~prior year.~~three months ended September 30, 2023, $6.9 million of capital expenditures were incurred primarily related to operational improvements in the United States and the United Kingdom segments. We expect capital expenditures to be approximately $50.0 million for fiscal year 2024.

Cash used in financing activities was ~~$34.8~~$17.6 million for the ~~nine~~three months ended ~~March 31,~~September 30, 2023, a decrease of ~~$207.7~~$27.4 million compared to ~~$172.9~~$9.8 million of cash provided by financing activities in the prior year period. The ~~decrease~~increase in cash ~~provided by~~used in financing activities iswas primarily due to higher ~~borrowings under the Credit Agreement to finance the THWR acquisition, higher share repurchases, and payment of shares withheld for employee payroll taxes~~net debt repayment during the ~~same period in the prior year.~~three months ended September 30, 2023.

~~Operating~~ Free Cash ~~Flows~~Flow

~~Operating~~Our free cash ~~flows were $4.9~~flow was $7.1 million for the ~~nine~~three months ended ~~March 31,~~September 30, 2023, ~~a decrease~~an increase of ~~$60.4~~$19.5 million from ~~$65.2 million provided by operating~~negative free cash ~~flows~~flow of $12.3 million in the ~~nine~~three months ended ~~March 31,~~September 30, 2022. This ~~decrease~~increase versus the prior year period resulted primarily from ~~a decrease~~an increase in cash ~~flow~~flows from operations of ~~$72.9~~$19.1 million driven by the reasons explained ~~above, partially offset by reduction in capital expenditures.~~above. See ~~the~~ Reconciliation of Non-U.S. GAAP Financial Measures to U.S. GAAP Measures following the discussion of our results of operations for definitions and a reconciliation from our net cash provided by operating activities to ~~operating~~ free cash ~~flows.~~flow.

Share Repurchase Program

In January 2022, the Company’s Board of Directors authorized the repurchase of up to $200.0 million of the Company’s issued and outstanding common stock. Repurchases may be made from time to time in the open market, pursuant to pre-set trading plans, in private transactions or otherwise. The current 2022 authorization does not have a stated expiration date. The extent to which the Company repurchases its shares and the timing of such repurchases will depend upon market conditions and other corporate considerations. During the ~~nine~~three months ended ~~March 31,~~September 30, 2023, the Company ~~did not repurchase any~~repurchased no shares under the repurchase program. As of ~~March 31,~~September 30, 2023, the Company had ~~$173.5~~$173.5 million of remaining authorization under the share repurchase program.

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Reconciliation of Non-U.S. GAAP Financial Measures to U.S. GAAP Measures

We have included in this report measures of financial performance that are not defined by U.S. GAAP. We believe that these measures provide useful information to investors and include these measures in other communications to investors.

For each of these non-U.S. GAAP financial measures, we are providing below a reconciliation of the differences between the non-U.S. GAAP measure and the most directly comparable U.S. GAAP measure, an explanation of why our management and Board of Directors believe the non-U.S. GAAP measure provides useful information to investors and any additional purposes for which our management and Board of Directors use the non-U.S. GAAP measures. These non-U.S. GAAP measures should be viewed in addition to, and not in lieu of, the comparable U.S. GAAP measures.

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~~Net Sales - Constant Currency Presentation~~

We believe that net sales adjusted for the impact of foreign currency provides useful information to investors because it provides transparency to underlying performance in our consolidated net sales by excluding the effect that foreign currency exchange rate fluctuations have on year-to-year comparability given the volatility in foreign currency exchange markets. To present net sales adjusted for the impact of foreign currency, current period net sales for entities reporting in currencies other than the U.S. Dollar are translated into U.S. Dollars at the average monthly exchange rates in effect during the corresponding period of the prior fiscal year, rather than at the actual average monthly exchange rate in effect during the current period of the current fiscal year. As a result, the foreign currency impact is equal to the current year results in local currencies multiplied by the change in average foreign currency exchange rate between the current fiscal period and the corresponding period of the prior fiscal year.

Net Sales - Adjusted for the Impact of ~~Acquisitions,~~ Divestitures and Discontinued Brands

We also exclude the impact of ~~acquisitions,~~ divestitures and discontinued brands when comparing net sales to prior periods, which results in the presentation of certain non-U.S. GAAP financial measures. The Company's management believes that excluding the impact of ~~acquisitions,~~ divestitures and discontinued brands when presenting period-over-period results of net sales aids in comparability.

To present net sales adjusted 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 present net sales adjusted for the impact of divestitures and discontinued brands, the net sales of a divested business or discontinued brand are excluded from all periods.

A reconciliation between reported net sales and net sales adjusted for the impact of ~~foreign currency, acquisitions,~~ divestitures and discontinued brands is as follows:

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(amounts in thousands) North America International Hain Consolidated
Net sales - Three months ended March 31, 2023 $ 286,649 $ 168,594 $ 455,243
Acquisitions, divestitures and discontinued brands (163) — (163)
Impact of foreign currency exchange 1,881 14,760 16,641
Net sales on a constant currency basis adjusted for acquisitions, divestitures and discontinued brands - Three months ended March 31, 2023 $ 288,367 $ 183,354 $ 471,721
Net sales - Three months ended March 31, 2022 $ 325,742 $ 177,197 $ 502,939
Acquisitions, divestitures and discontinued brands (2,311) — (2,311)
Net sales adjusted for acquisitions, divestitures and discontinued brands - Three months ended March 31, 2022 $ 323,431 $ 177,197 $ 500,628
Net sales decline (12.0) % (4.9) % (9.5) %
Impact of acquisitions, divestitures and discontinued brands 0.6 % — % 0.4 %
Impact of foreign currency exchange 0.6 % 8.4 3.3 %
Net sales (decline) growth on a constant currency basis adjusted for acquisitions, divestitures and discontinued brands (10.8) % 3.5 % (5.8) %
Net sales - Nine months ended March 31, 2023 $ 857,406 $ 491,396 $ 1,348,802
Acquisitions, divestitures and discontinued brands (34,663) — (34,663)
Impact of foreign currency exchange 5,024 64,266 69,290
Net sales on a constant currency basis adjusted for acquisitions, divestitures and discontinued brands - Nine months ended March 31, 2023 $ 827,767 $ 555,662 $ 1,383,429
Net sales - Nine months ended March 31, 2022 $ 866,281 $ 568,502 $ 1,434,783
Acquisitions, divestitures and discontinued brands (7,142) — (7,142)
Net sales adjusted for acquisitions, divestitures and discontinued brands - Nine months ended March 31, 2022 $ 859,139 $ 568,502 $ 1,427,641
Net sales decline (1.0) % (13.6) % (6.0) %
Impact of acquisitions, divestitures and discontinued brands (3.3) % — % (1.9) %
Impact of foreign currency exchange 0.6 % 11.3 % 4.8 %
Net sales decline on a constant currency basis adjusted for acquisitions, divestitures and discontinued brands (3.7) % (2.3) % (3.1) %


(amounts in thousands)	North America			International			Hain Consolidated
Net sales - Three months ended September 30, 2023	$	260,054		$	164,975		$	425,029
Divestitures and discontinued brands	8			—			8

Net sales adjusted for divestitures and discontinued brands - Three months ended September 30, 2023	$	260,062		$	164,975		$	425,037

Net sales - Three months ended September 30, 2022	$	288,396		$	150,955		$	439,351
Divestitures and discontinued brands	(1,762)			—			(1,762)

Net sales adjusted for divestitures and discontinued brands - Three months ended September 30, 2022	$	286,634		$	150,955		$	437,589

Net sales (decline) growth	(9.8)		%	9.3		%	(3.3)		%
Impact of divestitures and discontinued brands	0.5		%	—		%	0.4		%

Net sales (decline) growth adjusted for divestitures and discontinued brands	(9.3)		%	9.3		%	(2.9)		%

Adjusted EBITDA

The Company defines Adjusted EBITDA as net (loss) income before net interest expense, income taxes, depreciation and amortization, equity in net loss of equity-method investees, stock-based compensation, net, unrealized currency losses (gains), certain litigation and related costs, ~~CEO succession costs,~~ plant closure related costs-net, productivity and transformation costs, warehouse and manufacturing consolidation and other costs, costs associated with acquisitions, divestitures and other transactions, gains on sales of assets, ~~certain inventory write-downs, intangibles and~~ long-lived asset 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. In addition, management uses this measure for reviewing the financial results of the Company and as a component of performance-based executive compensation. Adjusted EBITDA is a non-U.S. GAAP measure and may not be comparable to similarly titled measures reported by other companies.

~~Table of Contents~~

We do not consider Adjusted EBITDA in isolation or as an alternative to financial measures determined in accordance with U.S. GAAP. The principal limitation of Adjusted EBITDA is that it excludes certain expenses and income that are required by U.S. GAAP to be recorded in our consolidated financial statements. In addition, Adjusted EBITDA is subject to inherent limitations as this metric reflects the exercise of judgment by management about which expenses and income are excluded or included in determining Adjusted EBITDA. In order to compensate for these limitations, management presents Adjusted EBITDA in connection with U.S. GAAP results.

Table of Contents

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

~~Table of Contents~~


		Three Months Ended March 31,				Nine Months Ended March 31,					Three Months Ended September 30,
(amounts in thousands)	(amounts in thousands)	2023		2022		2023		2022		(amounts in thousands)	2023		2022
Net (loss) income		$	(115,727)	$	24,531	$	(97,838)	$	74,831

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

Depreciation and amortization	Depreciation and amortization	13,784		12,638		37,909		34,396		Depreciation and amortization	12,305		11,970
Equity in net loss of equity-method investees	Equity in net loss of equity-method investees	528		383		1,226		1,374		Equity in net loss of equity-method investees	498		382
Interest expense, net	Interest expense, net	12,924		2,846		30,582		5,677		Interest expense, net	12,623		7,279
(Benefit) provision for income taxes	(Benefit) provision for income taxes	(39,587)		7,738		(30,599)		19,425		(Benefit) provision for income taxes	(5,379)		2,631
Stock-based compensation, net	Stock-based compensation, net	3,228		3,846		10,657		12,289		Stock-based compensation, net	3,742		3,994
Unrealized currency losses (gains)	Unrealized currency losses (gains)	202		(594)		651		(2,097)		Unrealized currency losses (gains)	35		(1,711)
Litigation and related costs	Litigation and related costs									Litigation and related costs
Certain litigation expenses, net(a)		(1,582)		2,005		3,363		5,389
Litigation expenses(a)										Litigation expenses(a)	1,524		2,463

Restructuring activities										Restructuring activities
Plant closure related costs, net										Plant closure related costs, net	1,841		(2)
Productivity and transformation costs										Productivity and transformation costs	6,403		773

Acquisitions, divestitures and other										Acquisitions, divestitures and other
Transaction and integration costs, net										Transaction and integration costs, net	118		1,367
Loss (gain) on sale of assets										Loss (gain) on sale of assets	62		(40)

Impairment charges										Impairment charges

Long-lived asset impairment										Long-lived asset impairment	694		—
Adjusted EBITDA										Adjusted EBITDA	$	24,090	$	36,029

Restructuring activities
CEO succession		—		—		5,113		—
Plant closure related costs, net		22		82		73		895
Productivity and transformation costs		3,933		1,626		5,692		7,077
Warehouse/manufacturing consolidation and other costs, net		2,871		94		899		2,632
Acquisitions, divestitures and other
Transaction and integration costs, net		215		3,419		1,984		12,151
(Gain) loss on sale of assets		(134)		55		(3,529)		(9,047)

Impairment charges
Inventory write-down		—		—		—		(46)
Intangibles and long-lived asset impairment		156,583		—		156,923		303
Adjusted EBITDA		$	37,260	$	58,669	$	123,106	$	165,249

(a) Expenses and items relating to securities class action and baby food litigation.

~~Adjusted EBITDA - Constant Currency Presentation~~

The Company provides Adjusted EBITDA and Adjusted EBITDA on a constant currency basis because the Company’s management believes that these presentations provide useful information to management, analysts and investors regarding certain additional financial and business trends relating to its results of operations and financial condition. In addition, management uses these measures for reviewing the financial results of the Company as well as a component of performance-based executive compensation. The Company believes presenting Adjusted EBITDA on a constant currency basis provides useful information to investors because it provides transparency to underlying performance in the Company’s Adjusted EBITDA by excluding the effect that foreign currency exchange rate fluctuations have on period-to-period comparability given the volatility in foreign currency exchange markets.

~~Table of Contents~~

~~A reconciliation between Adjusted EBITDA and constant currency Adjusted EBITDA for the three months ended March 31, 2023 and 2022 is as follows:~~


~~(amounts in thousands)~~	~~Hain Consolidated~~
~~Adjusted EBITDA - Three months ended March 31, 2023~~	$	~~37,260~~
~~Impact of foreign currency exchange~~	~~2,067~~
~~Adjusted EBITDA on a constant currency basis - Three months ended March 31, 2023~~	$	~~39,327~~

~~Adjusted EBITDA - Three months ended March 31, 2022~~	$	~~58,669~~

~~A reconciliation between Adjusted EBITDA and constant currency Adjusted EBITDA for the nine months ended March 31, 2023 and 2022 is as follows:~~


~~(amounts in thousands)~~	~~Hain Consolidated~~
~~Adjusted EBITDA - Nine months ended March 31, 2023~~	$	~~123,106~~
~~Impact of foreign currency exchange~~	~~7,594~~
~~Adjusted EBITDA on a constant currency basis - Nine months ended March 31, 2023~~	$	~~130,700~~

~~Adjusted EBITDA - Nine months ended March 31, 2022~~	$	~~165,249~~

~~Operating~~ Free Cash ~~Flows~~

Flow

In our internal evaluations, we use the ~~non-U.S. GAAP~~non-GAAP financial measure ~~“Operating Free~~“Free Cash ~~Flows”~~Flow.” The difference between ~~Operating~~ Free Cash ~~Flows~~Flow and cash ~~flow~~flows provided by or used in operating activities, which is the most comparable U.S. GAAP financial measure, is that ~~Operating~~ Free Cash ~~Flows~~Flow reflects the impact of purchases of property, plant and equipment (capital spending). Since capital spending is essential to maintaining our operational capabilities, we believe that it is a recurring and necessary use of cash. As such, we believe investors should also consider capital spending when evaluating our cash flows provided by or used in operating activities. We view ~~Operating~~ Free Cash ~~Flows~~Flow as an important measure because it is one factor in evaluating the amount of cash available for discretionary investments. We do not consider ~~Operating~~ Free Cash ~~Flows~~Flow in isolation or as an alternative to financial measures determined in accordance with U.S. GAAP.

A reconciliation from cash flows provided by (used in) operating activities to ~~Operating~~ Free Cash ~~Flows~~Flow is as follows:
Nine Months Ended March 31,
(amounts in thousands) 2023 2022
Net cash provided by operating activities $ 26,309 $ 99,186
Purchases of property, plant and equipment (21,434) (33,939)
Operating free cash flows $ 4,875 $ 65,247


	Three Months Ended September 30,
(amounts in thousands)	2023		2022
Net cash provided by (used in) operating activities	$	14,030	$	(5,116)
Purchases of property, plant and equipment	(6,906)		(7,215)
Free cash flow	$	7,124	$	(12,331)

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Critical Accounting Estimates

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States. The accounting principles we use require us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and amounts of income and expenses during the reporting periods presented. We believe in the quality and reasonableness of our critical accounting policies; however, materially different amounts may be reported under different conditions or using assumptions different from those that we have applied. The accounting policies that have been identified as critical to our business operations and to understanding the results of our operations pertain to variable consideration, valuation of ~~accounts and chargeback receivable, valuation of~~ long-lived assets, goodwill and intangible assets, stock-based compensation and valuation allowances for deferred tax assets. The application of each of these critical accounting policies and estimates is discussed in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the fiscal year ended June 30, ~~2022~~2023, from which there have been no material changes.

Recent Accounting Pronouncements

~~Refer to Note 2,~~ ~~Basis of Presentation, in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.~~There were no recently adopted accounting pronouncements or recently issued accounting pronouncements not yet effective that we believe will have a significant impact on our consolidated financial statements.

Seasonality

Certain of our product lines have seasonal fluctuations. Hot tea, hot-eating desserts and soup sales are stronger in colder months, while sales of snack foods, sunscreen and certain of our personal care products are stronger in the warmer months. As such, our results of operations and our cash flows for any particular quarter are not indicative of the results we expect for the full year, and our historical seasonality may not be indicative of future quarterly results of operations. In recent years, net sales and diluted earnings per share in the first fiscal quarter have typically been the lowest of our four quarters.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

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, ~~2022~~2023 during the ~~nine~~three months ended ~~March 31,~~September 30, 2023. 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, ~~2022.~~2023.

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Item 4. Controls and 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 intended 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 Securities and Exchange Commission’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 ~~March 31,~~September 30, 2023.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect every misstatement. An evaluation of effectiveness is subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may decrease over time.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal controls over financial reporting that occurred during the ~~quarter~~three months ended ~~March 31,~~September 30, 2023 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

The information called for by this item is incorporated herein by reference to Note 16, Commitments and Contingencies, in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Item 1A. Risk Factors

There have been no material changes from the discussion of the material factors that make an investment in the Company speculative or risky contained in the section entitled "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, ~~2022,~~2023, filed with the SEC on August ~~25, 2022.~~24, 2023.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

~~The table below sets forth information regarding repurchases~~During the three months ended September 30, 2023, there were no shares repurchased under share repurchase programs approved by the Board of Directors.

During the three months ended September 30, 2023, there were 86,036 shares withheld by the Company ~~of its common stock during the periods indicated.~~

Period (a)
Total number
of shares
purchased (1)
(b)
Average
price paid
per share
(c)
Total number of
shares purchased
as part of
publicly
announced plans
(d)
Maximum
number of shares
that may yet be
purchased under
the plans (in millions of dollars) (2)
January 1, 2023 - January 31, 2023 — $ — — $ 173.5
February 1, 2023 - February 28, 2023 (3,260) (20.48) — $ 173.5
March 1, 2023 - March 31, 2023 — — — $ 173.5
Total (3,260) $ (20.48) —

~~(1) Consists of shares surrendered for payment of employee payroll taxes due on~~to satisfy tax withholding obligations in connection with shares issued under stock-based compensation ~~plans.~~plans, at an average price of $10.17 per share. These shares withheld to satisfy tax withholding obligations do not constitute repurchases by the Company.

(2) In January 2022, the Company's Board of Directors authorized the repurchase of up to $200 million of the Company’s issued and outstanding common stock. Repurchases may be made from time to time in the open market, pursuant to pre-set trading plans, in private transactions or otherwise. The authorization does not have a stated expiration date. The extent to which the Company repurchases its shares and the timing of such repurchases will depend upon market conditions, and other corporate considerations. During the quarter ended March 31, 2023, the Company did not repurchase any shares under the repurchase program. As of March 31, 2023, the Company had $173.5 million of remaining authorization under the share repurchase program.

~~Table of Contents~~

Item 5. Other Information

~~Amended~~Rule 10b5-1 Trading Arrangements and ~~Restated By-Laws~~Non-Rule 10b5-1 Trading Arrangements

~~On May 8,~~During the three months ended September 30, 2023, ~~the Board of Directors (the “Board”) of the Company approved an amendment and restatement~~none of the Company’s ~~By-Laws~~directors or officers (as ~~amended and restated, the “By-Laws”), effective May 8, 2023, as set forth below.~~

~~Advance Notice Amendment~~

The By-Laws were primarily amended to establish informational, timing and procedural requirements for stockholders intending to submit a proposal or director nomination at either an annual or special meeting of stockholders, including:

•for a stockholder to properly bring a nomination or other business before an annual meeting of stockholders, the stockholder must generally provide notice to the Company’s Secretary not less than ninety (90) days nor more than one hundred twenty (120) days prior to the first anniversary of the preceding year’s annual meeting of stockholders;

•the stockholder’s notice must provide certain information or other documentation about the stockholder and, if applicable, specified information related to the stockholder’s director nominee or to the other business brought by the stockholder; and

•defined in ~~light of the adoption of~~ Rule ~~14a-19~~16a-1(f) of the Securities Exchange Act of 1934, as ~~amended, to provide for universal proxies,~~amended), adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the By-Laws require stockholders relying on the universal proxy rule to make certain representations to the Company, certify compliance with the universal proxy rule and submit director nominee questionnaires to the Company’s Secretary.

~~Administrative Amendments~~

The By-Laws were also amended to incorporate certain administrative amendments, including to (i) conform the Company’s meeting notice provision with the applicable Delaware statute, (ii) incorporate a new Delaware law provision related to noticesSecurities Act of adjournments, including with respect to remote meetings of stockholders, and (iii) remove the requirement that the Company provide a list of stockholders at stockholder meetings in line with Delaware law updates. Moreover, the By-Laws provide that any stockholder soliciting proxies from other stockholders must use a proxy card color other than white, which color is reserved for the exclusive use by the Board.

~~The foregoing description is qualified in its entirety by reference to the By-Laws, which are attached hereto~~1933, as ~~Exhibit 3.2 and incorporated herein by reference.~~amended).

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Item 6. Exhibits


Exhibit Number						Description

3.1						Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2021, filed with the SEC on August 26, 2021).

3.2						~~Amended and Restated By-Laws.~~

~~3.3~~						The Hain Celestial Group, Inc. Amended and Restated By-Laws ~~marked~~(incorporated by reference to ~~show amendments effective as~~Exhibit 3.2 of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2023, filed with the SEC on May ~~8, 2023.~~9, 2023).

4.1						Specimen of common stock certificate (incorporated by reference to Exhibit 4.1 of Amendment No. 1 to the Company’s Registration Statement on Form S-4 filed with the SEC on April 24, 2000).

10.1*10.1						~~Restricted Share Unit~~Second Amendment, dated August 22, 2023, to the Fourth Amended and Restated Credit Agreement, ~~under The Hain Celestial Group, Inc. 2022 Long Term Incentive~~dated December 22, 2021, by and ~~Stock Award Plan – Wendy P. Davidson (2023-2025 LTIP).~~among the Company, the Lenders party thereto and Bank of America, N.A., as administrative agent.

10.2*10.2						~~Performance Share Unit Agreement under The Hain Celestial Group, Inc. 2022 Long Term Incentive and Stock Award Plan – Wendy P. Davidson (2023-2025 LTIP; Relative Total Shareholder Return).~~

10.3*						~~Performance Share Unit Agreement under The Hain Celestial Group, Inc. 2022 Long Term Incentive and Stock Award Plan – Wendy P. Davidson (2023-2025 LTIP; Absolute Total Shareholder Return).~~

10.4*						~~Restricted Share Unit Agreement under The Hain Celestial Group, Inc. 2022 Long Term Incentive and Stock Award Plan – Wendy P. Davidson (Make-Whole RSU Award).~~

10.5*						~~Separation Agreement,~~Offer Letter, dated ~~as of February 6,~~August 23, 2023, between the Company and ~~David J. Karch.~~Lee A. Boyce.











31.1						Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.

31.2						Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.

32.1						Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2						Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH						Inline XBRL Taxonomy Extension Schema Document.

101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*Indicates management contract or compensatory plan or arrangement.

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		THE HAIN CELESTIAL GROUP, INC.
		(Registrant)

Date:	~~May 9,~~November 7, 2023	/s/ Wendy P. Davidson
		Wendy P. Davidson, President and Chief Executive Officer (Principal Executive Officer)


Date:	~~May 9,~~November 7, 2023	/s/ ~~Christopher J. Bellairs~~Lee A. Boyce
		~~Christopher J. Bellairs,~~ Lee A. Boyce, Executive Vice President and Chief Financial Officer (Principal Financial Officer)


Date:	~~May 9,~~November 7, 2023	/s/ Michael J. Ragusa
		Michael J. Ragusa, Senior Vice President and Chief Accounting Officer (Principal Accounting Officer)

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	Unaudited supplemental pro forma information
	Three Months Ended		Nine Months Ended
	March 31, 2022		March 31, 2022
Net sales	$	502,939	$	1,488,483
Net income from operations(1)	$	26,970	$	81,415
Diluted net (loss) income per common share from operations	$	0.30	$	0.86


				Location and Amount of Gain (Loss) Recognized in the Consolidated Statement of Operations on Cash Flow Hedging Relationships
				Three Months Ended March 31, 2023						Three Months Ended March 31, 2022
				Cost of sales		Interest and other financing expense, net		Other expense/income, net		Cost of sales		Interest and other financing expense, net		Other expense/income, net
The effects of cash flow hedging:
	Gain (loss) on cash flow hedging relationships
		Interest rate swaps
			Amount of gain (loss) reclassified from AOCL into income	$	—	$	1,792	$	—	$	—	$	(64)	$	—

		Cross-currency swaps
			Amount of (loss) gain reclassified from AOCL into income	$	—	$	(46)	$	—	$	—	$	46	$	637

		Foreign currency forward contracts
			Amount of gain reclassified from AOCL into income	$	—	$	—	$	—	$	81	$	—	$	—


				Location and Amount of Gain (Loss) Recognized in the Consolidated Statement of Operations on Cash Flow Hedging Relationships
				Nine Months Ended March 31, 2023						Nine Months Ended March 31, 2022
				Cost of sales		Interest and other financing expense, net		Other expense (income), net		Cost of sales		Interest and other financing expense, net		Other expense (income), net
The effects of cash flow hedging:
	Gain (loss) on cash flow hedging relationships
		Interest rate swaps
			Amount of gain (loss) reclassified from AOCL into income	$	—	$	4,088	$	—	$	—	$	(273)	$	—

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

		Foreign currency forward contracts
			Amount of gain reclassified from AOCL into income	$	—	$	—	$	—	$	107	$	—	$	—


Derivatives in Net Investment Hedging Relationships	Amount of (Loss) Gain Recognized in AOCL on Derivatives				Location of (Loss) Gain Recognized in (Expense) Income on Derivatives	Amount of Gain (Loss) Recognized in Income (Expense) on Derivatives
	Three Months Ended March 31,					Three Months Ended March 31,
	2023		2022			2023		2022
Cross-currency swaps	$	(144)	$	1,569	Interest and other financing expense, net	$	484	$	143


Period	(a) Total number of shares purchased (1)	(b) Average price paid per share		(c) Total number of shares purchased as part of publicly announced plans	(d) Maximum number of shares that may yet be purchased under the plans (in millions of dollars) (2)
January 1, 2023 - January 31, 2023	—	$	—	—	$	173.5
February 1, 2023 - February 28, 2023	(3,260)	(20.48)		—	$	173.5
March 1, 2023 - March 31, 2023	—	—		—	$	173.5
Total	(3,260)	$	(20.48)	—