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~~December 31, 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.)


221 River Street, Hoboken, NJ						07030
(Address of principal executive offices)						(Zip Code)

(516) 587-5000

~~4600 Sleepytime Drive, Boulder, CO 80301~~

(~~Address of principal executive offices, including zip code)~~

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

~~1111 Marcus Avenue, Lake Success, NY 11042~~

(N/A
Former name, former address and former fiscal year, if changed since last ~~report)~~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 of ~~May 3, 2023,~~February 1, 2024, there were ~~89,443,996~~89,832,428 shares outstanding of the registrant’s Common Stock, par value $.01 per share.

Table of Contents

THE HAIN CELESTIAL GROUP, INC.

Index


	Part I - Financial Information	Page

Item 1.	Financial Statements
	Consolidated Balance Sheets - ~~March~~December 31, ~~202~~3 2023 and June 30, ~~2022~~2023	3
	Consolidated Statements of Operations - Three and ~~nine~~six months ended ~~March~~December 31, 2023 and 2022	4
	Consolidated Statements of Comprehensive Income (Loss)~~Income~~ - Three and ~~nine~~six months ended ~~March~~December 31, 2023 and 2022	5
	Consolidated Statement of Stockholders’ Equity - Three and ~~nine~~six months ended ~~March~~December 31, 2023 and 2022	6
	Consolidated Statements of Cash Flows - ~~Nine~~Six months ended ~~March~~December 31, 2023 and 2022	8
	Notes to Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3537
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	51
Item 4.	Controls and Procedures	52

	Part II - Other Information

Items 3 and 4 are not applicable.
Item 1.	Legal Proceedings	53
Item 1A.	Risk Factors	53
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	53
Item 5.	Other Information	5553
Item 6.	Exhibits	5554
Signatures		5655

Table of Contents

Forward-Looking Statements

This Quarterly Report on Form 10-Q for the quarter ended ~~March~~December 31, 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.

Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

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

(In thousands, except par values)


		March 31,		June 30,
		2023		2022
	December 31,						December 31,		June 30,
	2023							2023
ASSETS	ASSETS
Current assets:	Current assets:
Current assets:
Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	43,682	$	65,512
Accounts receivable, less allowance for doubtful accounts of $3,229 and $1,731, respectively		179,114		170,661
Cash and cash equivalents
Cash and cash equivalents
Accounts receivable, less allowance for doubtful accounts of $2,607 and $2,750, respectively
Inventories	Inventories	316,345		308,034
Prepaid expenses and other current assets	Prepaid expenses and other current assets	58,719		54,079
Assets held for sale		1,250		1,840

Total current assets
Total current assets
Total current assets	Total current assets	599,110		600,126
Property, plant and equipment, net	Property, plant and equipment, net	296,433		297,405
Goodwill	Goodwill	931,729		933,796
Trademarks and other intangible assets, net	Trademarks and other intangible assets, net	314,536		477,533
Investments and joint ventures	Investments and joint ventures	12,720		14,456
Operating lease right-of-use assets, net	Operating lease right-of-use assets, net	98,306		114,691
Other assets	Other assets	19,990		20,377

Total assets	Total assets	$	2,272,824	$	2,458,384
Total assets
Total assets
LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:	Current liabilities:
Current liabilities:
Current liabilities:
Accounts payable
Accounts payable
Accounts payable	Accounts payable	$	146,340	$	174,765
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	95,841		86,833
Current portion of long-term debt	Current portion of long-term debt	7,575		7,705

Total current liabilities

Total current liabilities

Total current liabilities	Total current liabilities	249,756		269,303
Long-term debt, less current portion	Long-term debt, less current portion	848,982		880,938
Deferred income taxes	Deferred income taxes	51,155		95,044
Operating lease liabilities, noncurrent portion	Operating lease liabilities, noncurrent portion	91,885		107,481
Other noncurrent liabilities	Other noncurrent liabilities	24,571		22,450

Total liabilities	Total liabilities	1,266,349		1,375,216
Commitments and contingencies (Note 16)
Total liabilities
Total liabilities
Commitments and contingencies (Note 17)						Commitments and contingencies (Note 17)
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	—		—
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
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: 111,818 and 111,339 shares, respectively; outstanding: 89,812 and 89,475 shares, respectively
Additional paid-in capital	Additional paid-in capital	1,213,783		1,203,126
Retained earnings	Retained earnings	671,260		769,098
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(152,945)		(164,482)
		1,733,211		1,808,853
Less: Treasury stock, at cost, 21,840 and 21,788 shares, respectively		(726,736)		(725,685)
	1,724,410
Less: Treasury stock, at cost, 22,006 and 21,864 shares, respectively
Total stockholders’ equity	Total stockholders’ equity	1,006,475		1,083,168
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	2,272,824	$	2,458,384

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~~SIX MONTHS ENDED ~~MARCH~~DECEMBER 31, 2023 AND 2022

(In thousands, except per share amounts)


		Three Months Ended March 31,				Nine Months Ended March 31,				Three Months Ended December 31,		Six Months Ended December 31,
		2023		2022		2023		2022		2023	2022		2023	2022
Net sales	Net sales	$	455,243	$	502,939	$	1,348,802	$	1,434,783
Cost of sales	Cost of sales	357,764		387,236		1,053,131		1,096,367
Gross profit	Gross profit	97,479		115,703		295,671		338,416
Selling, general and administrative expenses	Selling, general and administrative expenses	75,047		75,750		222,355		229,679
Intangibles and long-lived asset impairment		156,583		—		156,923		303
Long-lived asset impairment
Productivity and transformation costs
Amortization of acquired intangible assets

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

Operating (loss) income

Operating (loss) income

Operating (loss) income	Operating (loss) income	(140,926)		35,164		(97,714)		92,732
Interest and other financing expense, net	Interest and other financing expense, net	13,421		3,224		31,910		7,672
Other expense (income), net		439		(712)		(2,413)		(10,570)
Other income, net
(Loss) income before income taxes and equity in net loss of equity-method investees	(Loss) income before income taxes and equity in net loss of equity-method investees	(154,786)		32,652		(127,211)		95,630
(Benefit) provision for income taxes	(Benefit) provision for income taxes	(39,587)		7,738		(30,599)		19,425
Equity in net loss of equity-method investees	Equity in net loss of equity-method investees	528		383		1,226		1,374

Net (loss) income	Net (loss) income	$	(115,727)	$	24,531	$	(97,838)	$	74,831

Net (loss) income

Net (loss) income

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

Basic

Basic

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

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

Diluted

Diluted

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

See notes to consolidated financial statements.

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THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIES

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

FOR THE THREE AND ~~NINE~~SIX MONTHS ENDED ~~MARCH~~DECEMBER 31, 2023 AND 2022

(In thousands)


															Three Months Ended
	December 31, 2023																December 31, 2023				December 31, 2022
															Pretax amount	Tax (expense) benefit		After tax amount	Pretax amount	Tax (expense) benefit		After tax amount
Net (loss) income

Other comprehensive income:
Other comprehensive income:
Other comprehensive income:
Foreign currency translation adjustments before reclassifications
Foreign currency translation adjustments before reclassifications
Foreign currency translation adjustments before reclassifications

Change in deferred losses on cash flow hedging instruments
Change in deferred losses on cash flow hedging instruments
Change in deferred losses on cash flow hedging instruments
Change in deferred gains on fair value hedging instruments
Change in deferred losses on net investment hedging instruments

Total other comprehensive income
Total other comprehensive income
Total other comprehensive income

Total comprehensive income
Total comprehensive income
Total comprehensive income

		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		Six Months Ended
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
	December 31, 2023																December 31, 2023				December 31, 2022
		Pretax amount		Tax (expense) benefit		After-tax amount		Pretax amount		Tax (expense) benefit		After-tax amount			Pretax amount	Tax (expense) benefit		After tax amount	Pretax amount	Tax (expense) benefit		After tax amount
Net (loss) income	Net (loss) income					$	(97,838)					$	74,831

Other comprehensive income (loss):	Other comprehensive income (loss):
Other comprehensive income (loss):
Other comprehensive income (loss):
Foreign currency translation adjustments before reclassifications
Foreign currency translation adjustments before reclassifications
Foreign currency translation adjustments before reclassifications	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)
Change in deferred (losses) gains on cash flow hedging instruments
Change in deferred (losses) gains on cash flow hedging instruments
Change in deferred (losses) gains on cash flow hedging instruments
Change in deferred (losses) gains on fair value hedging instruments
Change in deferred losses on net investment hedging instruments
Total other comprehensive (loss) income

Total comprehensive (loss) income	Total comprehensive (loss) income					$	(86,301)					$	37,492
Total comprehensive (loss) income
Total comprehensive (loss) income

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~~SIX MONTHS ENDED ~~MARCH~~DECEMBER 31, 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
Net loss
Other comprehensive loss	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	24	1											1

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

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

Balance at September 30, 2023
Net loss
Other comprehensive income	Other comprehensive income											53,598		53,598
Issuance of common stock pursuant to stock-based compensation plans	Issuance of common stock pursuant to stock-based compensation plans	142	1											1

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

Stock-based compensation expense	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 December 31, 2023

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~~SIX MONTHS ENDED ~~MARCH~~DECEMBER 31, 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
Net income							19,411							19,411

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

Employee shares withheld for taxes									29	(1,175)				(1,175)
Repurchase of common stock									4,525	(175,687)				(175,687)
Stock-based compensation expense					4,287									4,287
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
Balance at June 30, 2022
Net income	Net income						24,531							24,531
Other comprehensive loss	Other comprehensive loss											(16,120)		(16,120)
Issuance of common stock pursuant to stock-based compensation plans	Issuance of common stock pursuant to stock-based compensation plans	83	1		(1)									—
Employee shares withheld for taxes	Employee shares withheld for taxes								40	(1,597)				(1,597)
Repurchase of common stock									3,574	(130,472)				(130,472)
Stock-based compensation expense	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
Net income
Other comprehensive income
Issuance of common stock pursuant to stock-based compensation plans
Employee shares withheld for taxes
Stock-based compensation expense
Balance at December 31, 2022

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~~SIX MONTHS ENDED ~~MARCH~~DECEMBER 31, 2023 AND 2022

(In thousands)


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

Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:

Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:

Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Depreciation and amortization
Depreciation and amortization
Depreciation and amortization	Depreciation and amortization	37,909		34,396
Deferred income taxes	Deferred income taxes	(44,809)		7,374

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
Equity in net loss of equity-method investees
Stock-based compensation, net	Stock-based compensation, net	10,657		12,289

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
Long-lived asset impairment
Loss (gain) on sale of assets
Other non-cash items, net	Other non-cash items, net	(1,526)		(2,155)
(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
Accounts receivable	Accounts receivable	(7,926)		14,150
Inventories	Inventories	(8,534)		(4,371)
Other current assets	Other current assets	455		(10,996)
Other assets and liabilities	Other assets and liabilities	3,496		(2,705)
Accounts payable and accrued expenses	Accounts payable and accrued expenses	(20,195)		(16,435)
Net cash provided by operating activities		26,309		99,186
Net cash provided by (used in) operating 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)
Acquisitions of businesses, net of cash acquired		—		(260,474)
Purchases of property, plant and equipment
Purchases of property, plant and equipment

Investments and joint ventures, net
Investments and joint ventures, net
Investments and joint ventures, net	Investments and joint ventures, net	433		(614)
Proceeds from sale of assets	Proceeds from sale of assets	7,758		10,756

Net cash used in investing activities	Net cash used in investing activities	(13,243)		(284,271)
Net cash used in investing activities
Net cash used in investing 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
Borrowings under bank revolving credit facility
Repayments under bank revolving credit facility	Repayments under bank revolving credit facility	(301,000)		(370,000)
Borrowings under term loan		—		300,000

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

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

Employee shares withheld for taxes	Employee shares withheld for taxes	(1,051)		(32,630)
Net cash (used in) provided by financing activities		(34,792)		172,858
Employee shares withheld for taxes
Employee shares withheld for taxes
Net cash used in financing activities
Effect of exchange rate changes on cash	Effect of exchange rate changes on cash	(104)		(5,836)

Net decrease in cash and cash equivalents		(21,830)		(18,063)
Net increase (decrease) in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents
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 end of period	Cash and cash equivalents at end of period	$	43,682	$	57,808

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 includes ~~the Company's~~the Company’s equity in the current ~~earnings~~losses or ~~losses~~earnings of such companies.

The ~~Company's~~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~~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 and six months ended December 31, 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~~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 w~~as $290,856~~was $159,760 and ~~$112,607~~$189,794 during the ~~nine~~six months ended ~~March~~December 31, 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 Standards Codification to reflect the issuance of SEC Staff Accounting Bulletin No. 120, among other things. The Company adopted this conforming guidance upon issuance, which had no material impact on its condensed consolidated financial statements and related disclosures.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): ~~Accounting for Investments in~~Improvements to Income Tax ~~Credit Structures Using the Proportional Amortization Method~~Disclosures”, which ~~would allow reporting~~will require entities to ~~consistently account for equity investments made primarily for~~disclose more detailed information in the ~~purpose~~reconciliation of ~~receiving~~their statutory tax rate to their effective tax rate. The ASU also requires entities to disclose more detailed information about income taxes paid, including by jurisdiction, pretax income (loss) from continuing operations, and income tax ~~credits and other income tax benefits This ASU is~~expense (benefit). The amendments are effective for fiscal years beginning after December 15, ~~2023. This standard will not have any impact~~2024 and for interim periods within fiscal years beginning after December 15, 2025. The amendments should be applied on a prospective basis. Retrospective application is permitted. The Company is currently evaluating the ~~Company's~~provisions of the amendments and the effect on its future consolidated financial statements.

In ~~March 2020,~~November 2023, the FASB issued ASU ~~2020-04, "Reference Rate Reform~~2023-07, “Segment Reporting (Topic ~~848)~~280), ~~Facilitation~~Improvements to Reportable Segment Disclosures”, which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The amendments are effective for fiscal years beginning after December 15, 2023 and for interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the provisions of the ~~Effects of Reference Rate Reform~~amendments and the effect 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 change 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.its future consolidated financial statements.

~~ASU 2020-04 allows for different elections to be made at different points in time and the timing~~

Table 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.

Contents

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,
2023 2022 2023 2022
Numerator:
Net (loss) income $ (115,727) $ 24,531 $ (97,838) $ 74,831
Denominator:
Basic weighted average shares outstanding 89,421 91,139 89,369 94,099
Effect of dilutive stock options, unvested restricted stock and unvested restricted share units(1)
— 171 — 420
Diluted weighted average shares outstanding 89,421 91,310 89,369 94,519


	Three Months Ended December 31,				Six Months Ended December 31,
	2023		2022		2023		2022
Numerator:


Net (loss) income	$	(13,535)	$	10,966	$	(23,911)	$	17,889

Denominator:
Basic weighted average shares outstanding	89,811		89,380		89,661		89,343
Effect of dilutive stock options, unvested restricted stock and unvested restricted share units	—		198		—		192
Diluted weighted average shares outstanding	89,811		89,578		89,661		89,535




Basic net (loss) income per common share	$	(0.15)	$	0.12	$	(0.27)	$	0.20




Diluted net (loss) income per common share	$	(0.15)	$	0.12	$	(0.27)	$	0.20

~~(1)~~Due to athe incurred net loss ~~from operations,~~in the three and six months ended December 31, 2023, all common stock equivalents ~~are~~such as stock options and unvested restricted stock awards have been excluded from the computation of diluted net loss per share because the effect would have been anti-dilutive.

There were 372 restricted stock 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~~December 31, ~~2023 and~~ 2022, ~~respectively,~~ as such awards were anti-dilutive. There were ~~524 and 275~~453 stock-based awards comprised of restricted stock awards and stock options excluded from the calculation of diluted net ~~(loss)~~ income per share for the ~~nine~~six months ended ~~March~~December 31, ~~2023 and~~ 2022, ~~respectively,~~ as such awards were anti-dilutive.

~~Additionally, 399~~Additionally, 903 and ~~231~~401 stock-based awards outstanding at ~~March~~December 31, 2023 and 2022, respectively, were excluded from the calculation of diluted net (loss) income per share for the three months ended ~~March~~December 31, 2023 and 2022, respectively, as such awards

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were contingently issuable based on market or performance conditions, and such conditions had not been achieved during the respective periods. Furthermore, ~~366~~515 and ~~541~~286 stock-based awards outstanding at ~~March~~December 31, 2023 and 2022, respectively, were excluded from the calculation of diluted net (loss) income per share for the ~~nine~~six months ended ~~March~~December 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)~~(“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~~in the United States and was part of the Company’s North America reportable segment. During the ~~nine~~six months ended ~~March~~December 31, ~~2023,~~2022, 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.~~$3,359.

5. INVENTORIES

Inventories consisted of the following:


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

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6. PROPERTY, PLANT AND EQUIPMENT, NET

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


		March 31, 2023		June 30, 2022
	December 31, 2023					December 31, 2023	June 30, 2023
Land	Land	$	11,293	$	11,216
Buildings and improvements	Buildings and improvements	50,818		51,849
Machinery and equipment	Machinery and equipment	317,883		296,398
Computer hardware and software	Computer hardware and software	65,065		65,680
Furniture and fixtures	Furniture and fixtures	19,762		23,522
Leasehold improvements	Leasehold improvements	48,757		54,999
Construction in progress	Construction in progress	32,070		27,200
		545,648		530,864
Less: Accumulated depreciation and impairment		249,215		233,459
		$	296,433	$	297,405
	520,594
Less: Accumulated depreciation
	$

Depreciation expense for the three months ended ~~March~~December 31, 2023 and 2022 was ~~$9,649~~$8,352 and ~~$8,292,~~$8,195, respectively. Depreciation expense for the ~~nine~~six months ended ~~March~~December 31, 2023 and 2022 was ~~$25,911~~$18,178 and ~~$22,944,~~$16,262, respectively.

As a result of a decline in actual and projected performance and cash flows related to an asset group primarily comprised of certain production assets in the North America reportable segment, the Company determined that an interim impairment test of the asset group was required to be performed. The ~~Company recognized impairment charges of $244 and $584 during~~fair value was determined using a discounted cash flow analysis. During the three and ~~nine~~six months ended ~~March~~December 31, 2023, ~~respectively, relating~~the Company recognized a non-cash impairment charge of $20,666 to ~~a facility in~~reduce the ~~United States that is held for sale. The facility had a net~~ carrying value of ~~$1,250 and $1,840 as~~such long-lived assets to their estimated fair value. Impairment charges were recorded within long-lived asset impairment on the Consolidated Statement of ~~March 31, 2023 and June 30, 2022,respectively.~~Operations.

During the ~~nine~~six months ended ~~March~~December 31, 2022, the Company recognized a non-cash impairment charge of ~~$303~~$340 relating to a facility in the United ~~Kingdom.~~States that was held for sale. During the six months ended December 31, 2023, the Company completed the sale of such facility for total cash proceeds of $1,182, net of brokerage and other fees, resulting in a loss in the amount of $68, which was included as a component of other income, net on the Consolidated Statement of Operations.

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7. 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 lease when it is reasonably certain that the Company will exercise that option. The Company’s lease agreements generally do not contain residual value guarantees or material restrictive covenants. Some of the Company’s leases contain variable lease payments, which are expensed as incurred unless those payments are based on an index or rate. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at lease commencement and included in the measurement of the lease liability; thereafter, changes to lease payments due to rate or index changes are recorded as variable lease expense in the period incurred. The Company does not have any related party leases, and sublease transactions are de minimis.

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


	Three Months Ended				Six Months Ended
	December 31, 2023		December 31, 2022		December 31, 2023		December 31, 2022
Operating lease expenses	$	4,796	$	2,238	$	9,374	$	7,213



Finance lease expenses	37		71		74		140
Variable lease expenses	190		169		372		349
Short-term lease expenses	418		390		813		886
Total lease expenses	$	5,441	$	2,868	$	10,633	$	8,588

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 Classification March 31, 2023 June 30, 2022
Assets
Operating lease ROU assets, net Operating lease right-of-use assets, net $ 98,306 $ 114,691
Finance lease ROU assets, net Property, plant and equipment, net 312 413
Total leased assets $ 98,618 $ 115,104
Liabilities
Current
Operating Accrued expenses and other current liabilities $ 10,827 $ 13,154
Finance Current portion of long-term debt 84 149
Non-current
Operating Operating lease liabilities, noncurrent portion 91,885 107,481
Finance Long-term debt, less current portion 243 278
Total lease liabilities $ 103,039 $ 121,062


Leases	Classification	December 31, 2023		June 30, 2023
Assets
Operating lease ROU assets, net	Operating lease right-of-use assets, net	$	91,388	$	95,894

Finance lease ROU assets, net	Property, plant and equipment, net	247		289

Total leased assets		$	91,635	$	96,183

Liabilities
Current
Operating	Accrued expenses and other current liabilities	$	10,598	$	10,489

Finance	Current portion of long-term debt	85		83

Non-current
Operating	Operating lease liabilities, noncurrent portion	86,022		90,014
Finance	Long-term debt, less current portion	179		222
Total lease liabilities		$	96,884	$	100,808

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Additional information related to leases is as follows:


	Six Months Ended
	December 31, 2023			December 31, 2022
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	8,728		$	8,173
Operating cash flows from finance leases	$	6		$	9
Financing cash flows from finance leases	$	39		$	106
ROU assets obtained in exchange for lease obligations:
Operating leases(1)(2)	$	2,140		$	(4,764)
Finance leases	$	—		$	60


Weighted average remaining lease term:
Operating leases	9.3 years			10.7 years
Finance leases	3.4 years			4.1 years
Weighted average discount rate:
Operating leases	4.9		%	4.7		%
Finance leases	4.5		%	4.6		%

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 %

(1) Includes adjustment for remeasurement of an operating lease during the three months ended December 31, 2023, which resulted in a net reduction of an ROU asset and a corresponding reduction in lease liability of $9,375.

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~~(1)~~(2) Includes adjustment for modification of an operating lease during the ~~nine~~three months ended ~~March~~December 31, ~~2023~~2022, which resulted in a reduction of an ROU ~~assets~~asset and lease ~~liabilities~~liability of $13,876 and $17,244, respectively, and recognition of a gain of $3,368 related to the modification.

Maturities of lease liabilities as of ~~March~~December 31, 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)
2025	2025	12,755		93		12,848
2026	2026	12,072		68		12,140
2027	2027	11,772		53		11,825
2028
Thereafter	Thereafter	77,724		25		77,749
Total lease payments	Total lease payments	133,179		359		133,538
Less: Imputed interest	Less: Imputed interest	30,467		32		30,499
Total lease liabilities	Total lease liabilities	$	102,712	$	327	$	103,039

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8. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

The following table provides 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

~~(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 an interim impairment test of goodwill in the U.S. reporting unit during the three months ended March 31, 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.


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




Translation	(3)		924		921
Balance as of December 31, 2023	$	697,050	$	242,511	$	939,561

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

December 31,
2023

June 30,
2023

Non-amortized intangible assets:

Trademarks and tradenames(1)

266,445

379,466

Trademarks and tradenames(1)

Amortized intangible assets:

Other intangibles(2)

159,027

199,448

Other intangibles

Less: Accumulated amortization

(110,936)

(101,381)

Net amortized intangible assets

48,091

98,067

Net other intangible assets

314,536

477,533

(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~~December 31, 2023 ~~and June 30, 2022, respectively.~~

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

~~During the three months ended March 31, 2023, as a result of a decline in actual and projected performance and cash flows of the ParmCrisps~~® and ~~Thinsters~~®June 30, 2023 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.~~.

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 December 31,				Six Months Ended December 31,
	2023		2022		2023		2022
Amortization of acquired intangibles	$	1,509	$	2,785	$	3,464	$	5,573

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		2029
Estimated amortization expense	$	2,836	$	5,477	$	5,083	$	4,996	$	4,113	$	3,615

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

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9. DEBT AND BORROWINGS

Debt and borrowings consisted of the following:


		March 31, 2023		June 30, 2022
	December 31, 2023					December 31, 2023	June 30, 2023
Revolving credit facility	Revolving credit facility	$	567,000	$	593,000
Term loans	Term loans	290,625		296,250
Less: Unamortized issuance costs	Less: Unamortized issuance costs	(1,401)		(1,105)
Other borrowings(1)	Other borrowings(1)	333		498
		856,557		888,643
	809,244
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
Long-term debt, less current portion	Long-term debt, less current portion	$	848,982	$	880,938

(1) Includes ~~$327~~$264 (June 30, ~~2022: $427)~~2023: $305) of finance lease obligations as discussed in Note 7, Leases.

(2) Includes ~~$84 (~~$85 (June 30, 2023~~June 30, 2022: $149)~~: $83) of short-term finance lease obligations as discussed in Note 7, 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.~~2026. The Company’s obligations under the Credit Agreement are guaranteed by certain existing and future domestic subsidiaries of the Company and are secured by liens on assets of the Company and its material domestic subsidiaries, including the equity interest in each of their direct subsidiaries and intellectual property, subject to agreed-upon exceptions.

The Credit Agreement includes financial covenants that require compliance with a consolidated 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~~Pursuant to the ~~Company (the “Amendment Period”),~~Second Amendment, the Company’s maximum consolidated secured leverage ratio iswas amended to be 5.00:~~1.00.~~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.

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~~December 31, 2023 was ~~5.90%~~7.90%. During fiscal 2021, the Company used interest rate swaps to hedge a portion of the interest rate risk related its outstanding variable rate debt. As of December 31, 2023, the notional amount of the interest rate swaps was $400,000 with fixed rate payments of 5.60%. Including hedge impact, the weighted average interest rate on outstanding borrowings under the Credit Agreement at December 31, 2023 was 6.81%. 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~~December 31, 2023, there were ~~$567,000~~$526,000 of loans under the Revolver, ~~$290,625~~$285,000 of Term Loans, and ~~$4,054~~$3,188 of letters of credit outstanding under the Credit Agreement. As of ~~March~~December 31, 2023, ~~$228,946~~$270,812 was available under the Credit Agreement, subject to compliance with the financial covenants. As of ~~March~~December 31, 2023, the Company was in compliance with all associated covenants.

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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.

In connection with the Second Amendment to its Credit Agreement during the first quarter of fiscal year 2024, the Company incurred debt issuance costs of approximately $3,854, of which $3,813 was deferred. Of the total deferred costs, $2,802 were associated with the Revolver and are being amortized on a straight-line basis within Other assets on the Consolidated Balance Sheets, and $1,011 are being recorded as an adjustment to the carrying amount of the Term Loans as a component of Interest and other financing expense, net over the term of the Credit Agreement utilizing the effective interest rate method.

Interest paid during the three and six months ended December 31, 2023 was $15,956 and $27,388, respectively. Interest paid during the three and six months ended December 31, 2022 was $9,378 and $16,066, respectively.

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10. INCOME TAXES

In general, the Company uses an estimated annual effective tax rate, which is based on expected annual income and statutory tax rates in the various jurisdictions in which the Company operates, to determine its quarterly provision for income taxes. 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%~~25.2% and an expense of ~~23.7%~~36.0% for the three months ended ~~March~~December 31, 2023 and 2022, respectively. The effective income tax rate was a benefit of ~~24.1%~~30.0% and an expense of ~~20.3%~~32.6% for the ~~nine~~six months ended ~~March~~December 31, 2023 and 2022, respectively. The effective income tax rate for the ~~nine~~six months ended ~~March~~December 31, 2023 was impacted by ~~ParmCrisps~~®tax expense related to stock-based compensation, global intangible low-taxed income, and ~~Thinsters~~® ~~trademarks and ParmCrisps~~® ~~asset group impairment charges~~ ~~(See Note 8, Goodwill and Other Intangible Assets)~~,limitations on the deductibility of executive compensation. The effective income tax rate for the six months ended December 31, 2022 was impacted by the gain on the sale of Westbrae, an operating lease modification during the second quarter, severance with respect to our former CEO (as part of the limitation on the deductibility of executive compensation), stock-based compensation and ~~changes in~~ uncertain tax positions. The effective income tax 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.~~ 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. 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 (Losses) on Net Investment Hedging Instruments, Net		Total












Balance at June 30, 2022	$	(168,225)	$	519	$	500	$	2,724	$	(164,482)
Other comprehensive (loss) income before reclassifications	(67,149)		11,360		1,145		4,666		(49,978)
Amounts reclassified into income	—		(767)		(1,348)		(369)		(2,484)
Net change in accumulated other comprehensive (loss) income for the three months ended September 30, 2022(1)	(67,149)		10,593		(203)		4,297		(52,462)
Balance at September 30, 2022	(235,374)		11,112		297		7,021		(216,944)
Other comprehensive income (loss) before reclassifications	59,674		(454)		(1,067)		(4,359)		53,794
Amounts reclassified into (income) expense	—		(1,411)		1,588		(373)		(196)
Net change in accumulated other comprehensive income (loss) for the three months ended December 31, 2022(1)	59,674		(1,865)		521		(4,732)		53,598
Balance at December 31, 2022	$	(175,700)	$	9,247	$	818	$	2,289	$	(163,346)

Balance at June 30, 2023	$	(138,028)	$	10,898	$	685	$	229	$	(126,216)
Other comprehensive (loss) income before reclassifications	(32,933)		4,159		430		1,741		(26,603)
Amounts reclassified into income	—		(1,715)		(717)		(372)		(2,804)
Net change in accumulated other comprehensive (loss) income for the three months ended September 30, 2023(1)	(32,933)		2,444		(287)		1,369		(29,407)
Balance at September 30, 2023	(170,961)		13,342		398		1,598		(155,623)
Other comprehensive income (loss) before reclassifications	36,536		(5,806)		(738)		(2,995)		26,997
Amounts reclassified into (income) expense	—		(1,801)		774		(372)		(1,399)
Net change in accumulated other comprehensive income (loss) for the three months ended December 31, 2023(1)	36,536		(7,607)		36		(3,367)		25,598
Balance at December 31, 2023	$	(134,425)	$	5,735	$	434	$	(1,769)	$	(130,025)

(1)See Note 15, 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~~six months ended ~~March~~December 31, 2023 and 2022.

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12. STOCK-BASED COMPENSATION AND INCENTIVE PERFORMANCE PLANS

Under the ~~Company's~~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~~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 December 31,		Six Months Ended December 31,
		2023		2022		2023		2022		2023	2022		2023	2022
Selling, general and administrative expense		$	3,228	$	3,846	$	10,657	$	12,289
Selling, general and administrative expenses

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

Related income tax benefit

Related income tax benefit

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~~six months ended ~~March~~December 31, 2023 is as follows:


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

~~The table above includes a total of 420 shares~~Shares granted during the ~~nine~~six months ended ~~March~~December 31, 2023 ~~that represent~~related to shares of RSUs and PSUs granted under 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.2024 - 2026 LTIP. Vested shares during the ~~nine~~six months ended ~~March~~December 31, 2023 include a total o~~f 5~~of 15 shares related to certain performance-based metrics being met and a total of ~~168~~463 shares related to service-based ~~RSUs~~.RSUs. There are market-based PSU awards outstanding under ~~both the~~2024 - 2026 LTIP, 2023 – 2025 LTIP and the 2022 – 2024 LTIP. At ~~March~~December 31, 2023, ~~321~~576 of such shares were outstanding under the 2024 – 2026 LTIP, 276 of such shares were outstanding under the 2023 – 2025 LTIP while 6851 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:


	Six Months Ended December 31,
	2023		2022
Fair value of RSAs, RSUs and PSUs granted	$	19,286	$	21,457
Fair value of shares vested	$	5,081	$	3,317
Tax benefit recognized from restricted shares vesting	$	650	$	502

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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~~December 31, 2023, there was ~~$22,478~~$27,305 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~~2.3 years.

~~2023-2025~~2024-2026 LTIP

During the ~~nine~~six months ended ~~March~~December 31, 2023, the Company granted market-based PSU awards under the ~~LTI Program~~LTIP with a total target payout of ~~420~~578 shares of common stock. At December 31, 2023, there were 576 such shares outstanding under the LTIP. 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~~October 25, 2023 through the earlier of (i) ~~September 6, 2025;~~October 25, 2026; (ii) the date the participant’s employment is terminated due to death or Disability (as defined); or (iii) the effective date of a Change in Control (as defined) (the ~~“TSR~~“2024 TSR Performance Period”). Vesting of ~~281~~384 target shares of the outstanding PSU awards is pursuant to a defined calculation of relative TSR over the 2024 TSR Performance Period (the ~~“Relative~~“2024 Relative TSR PSUs”). Vesting of ~~139~~192 target shares of the outstanding PSU awards is pursuant to the achievement of pre-established three-year compound annual TSR targets over the 2024 TSR Performance Period (the ~~“Absolute~~“2024 Absolute TSR PSUs”). Total shares eligible to vest for both the 2024 Relative TSR PSUs and 2024 Absolute TSR PSUs range from zero to 200% of the target amount. Grant date fair values are calculated using a ~~Monte-Carlo~~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:~~follows:


		Absolute TSR PSUs		Relative TSR PSUs
	Absolute 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)	$12.23			$15.42
Risk-free interest rate	Risk-free interest rate	3.54	%	3.54	%	Risk-free interest rate	4.98	%		4.98	%
Expected dividend yield	Expected dividend yield	—		—		Expected dividend yield	—			—
Expected volatility	Expected volatility	40.30	%	26.60	%	Expected volatility	33.70	%		23.10	%
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 in one-third (1/3) installments on each of the first, second and third anniversaries of the Start Date. Grant date fair values were calculated using a Monte-Carlo simulation model with grant date fair values per target share and related valuation assumptions as follows:

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

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~~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~~three and six months ended ~~March~~December 31, ~~2023, and unpaid amounts are accrued at March 31, 2023.~~2022.

13. INVESTMENTS

On October 27, 2015, the Company acquired a minority equity interest in Chop’t Creative Salad Company LLC, predecessor to Founders Table Restaurant Group, LLC (“Founders Table”). Founders Tableowns and operates the fast-casual restaurant chains ~~Chop't~~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~~December 31, 2023 and June 30, ~~2022,~~2023, the carrying value of the Company’s investment in Founders Table was ~~$7,788~~$6,878 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~~$4,533 and ~~$4,965~~$4,766 as of ~~March~~December 31, 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. 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~~December 31, 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	$	10,127	$	—	$	10,127	$	—




Liabilities:
Derivative financial instruments	$	6,487	$	—	$	6,487	$	—

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

Derivative financial instruments	Derivative financial instruments	$	7,476	$	—	$	7,476	$	—
Equity investment		560		560		—		—
Total		$	8,036	$	560	$	7,476	$	—

Derivative financial instruments

Derivative financial instruments

Liabilities:

Liabilities:

Liabilities:	Liabilities:
Derivative financial instruments	Derivative financial instruments	3,184		—		3,184		—
Derivative financial instruments
Derivative financial instruments

Total		$	3,184	$	—	$	3,184	$	—

There were no transfers of financial instruments between the three levels of fair value hierarchy during the ~~nine~~six months ended ~~March~~December 31, 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.

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

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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~~December 31, 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 and six months ended ~~March~~ December 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~~recognized a non-cash impairment ~~charges~~charge of ~~$45,798 for the ParmCrisps~~® $20,666 related to an asset group in the North America reportable segment, as discussed in ~~(see~~ Note ~~8, Goodwill~~6, Property, Plant and ~~Other Intangible Assets)~~Equipment, net. The asset group was primarily comprised of property, plant and equipment and fair value was determined using a discounted cash flow analysis. As of ~~March~~December 31, 2023, ~~THWR intangible assets~~the asset group’s property, plant and equipment were classified as Level 3 assets measured at fair value on a nonrecurring ~~basis with estimated fair value of $32,267.~~basis.

15. DERIVATIVES AND HEDGING ACTIVITIES

Risk Management Objective of Using Derivatives

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

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

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

Cash Flow Hedges of Interest Rate Risk

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

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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~~six months of fiscal ~~2023,~~2024, the Company estimates that an additional ~~$1,873~~$4,080 will be reclassified as a decrease to interest expense.

As of ~~March~~December 31, 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 Swap	4	$400,000

Cash Flow Hedges of Foreign Exchange Risk

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

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both of which will occur at the USD-EUR forward exchange rates in effect upon entering into the 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.

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~~six months of fiscal ~~2023,~~2024, the Company ~~estimate~~sestimates that no amount relating to cross-currency swaps will be reclassified to interest expense.

As of ~~March~~December 31, 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	1	£867	€1,000

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~~December 31, 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

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Fair Value Hedges

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

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

Gains and losses on the derivative representing hedge components excluded from the assessment of effectiveness are recognized over the life of the hedge on a systematic and rational basis, as documented at hedge inception in accordance with the Company’s accounting policy election. The earnings recognition of excluded components is presented in the same income statement line item as the earnings effect of the hedged transaction. During the remaining ~~three~~six months of fiscal ~~2023,~~2024, the Company estimates that an additional ~~$121~~$240 relating to cross currency swaps will be reclassified as a decrease to interest expense.

As of ~~March~~December 31, 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~~December 31, 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
March 31,
2023 June 30,
2022 March 31,
2023 June 30,
2022
Intercompany loan receivable $ 26,772 $ 25,899 $ 751 $ 122


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

	December 31, 2023		June 30, 2023		December 31, 2023		June 30, 2023
Intercompany loan receivable	$	27,266	$	26,945	$	321	$	924

Designated Hedges

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

Asset Derivatives

Liability Derivatives

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Asset Derivatives

Liability Derivatives

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Derivatives designated as hedging instruments:

Interest rate swaps

Prepaid expenses and other current assets

6,217

Accrued expenses and other current liabilities

—

Interest rate swaps

Other noncurrent assets

277

Other noncurrent liabilities

—

Cross-currency swaps

Prepaid expenses and other current assets

2,364

Accrued expenses and other current liabilities

—

Cross-currency swaps

Other noncurrent assets

—

Other noncurrent liabilities

540

Foreign currency forward contracts

Total derivatives designated as hedging instruments

8,858

540

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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

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Asset Derivatives

Liability Derivatives

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Derivatives designated as hedging instruments:

Interest rate swaps

Prepaid expenses and other current assets

4,230

Accrued expenses and other current liabilities

—

Interest rate swaps

Other noncurrent assets

—

Other noncurrent liabilities

3,184

Cross-currency swaps

Prepaid expenses and other current assets

2,400

Accrued expenses and other current liabilities

—

Cross-currency swaps

Other noncurrent assets

846

Other noncurrent liabilities

—

Total derivatives designated as hedging instruments

7,476

3,184

Total derivatives designated as hedging instruments

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The following table presents the pretax effect of cash flow hedge accounting on AOCL and Consolidated Statements of Operations for the three months ended ~~March~~December 31, 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 (Loss) Recognized in AOCL on Derivatives		Location of Gain (Loss) Reclassified from AOCL into Income (Expense)	Amount of Gain (Loss) Reclassified from AOCL into Income (Expense)
		Three Months Ended March 31,					Three Months Ended March 31,
		2023		2022			2023		2022
	Three Months Ended December 31,																Three Months Ended December 31,
	2023												2023			2022		2023	2022
Interest rate swaps	Interest rate swaps	$	(4,285)	$	2,023	Interest and other financing expense, net	$	1,792	$	(64)
Cross-currency swaps	Cross-currency swaps	—		503		Interest and other financing expense, net / Other expense (income), net	(46)		683
Foreign currency forward contracts	Foreign currency forward contracts	—		15		Cost of sales	—		81
Total	Total	$	(4,285)	$	2,541		$	1,746	$	700

The following table presents the pretax effect of cash flow hedge accounting on AOCL and Consolidated Statements of Operations for the ~~nine~~six months ended ~~March~~December 31, 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 (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
	Six Months Ended December 31,														Six Months Ended December 31,				Six Months Ended December 31,
	2023												2023				2022	2023		2022
Interest rate swaps	Interest rate swaps	$	10,295	$	2,678	Interest and other financing expense, net	$	4,927	$	(273)
Cross-currency swaps	Cross-currency swaps	—		1,872		Interest and other financing expense, net / Other expense (income), net	(276)		2,085
Foreign currency forward contracts	Foreign currency forward contracts	80		(64)		Cost of sales	—		107
Total	Total	$	10,375	$	4,486		$	4,651	$	1,919

2726

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The following table presents the pretax effect of the Company’s derivative financial instruments electing cash flow hedge accounting on the Consolidated Statements of Operations for the three months ended ~~of March~~December 31, 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 $ — $ —


				Location and Amount of Gain (Loss) Recognized in the Consolidated Statement of Operations on Cash Flow Hedging Relationships
				Three Months Ended December 31, 2023		Three Months Ended December 31, 2022
				Interest and other financing expense, net			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	$	2,393		$	1,988

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

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~~six months ended ~~of March~~December 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 Statement of Operations on Cash Flow Hedging Relationships
				Six Months Ended December 31, 2023		Six Months Ended December 31, 2022
				Interest and other financing expense, net			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	$	4,675		$	3,135

		Cross-currency swaps
			Amount of loss reclassified from AOCL into income	$	—		$	(230)

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


Derivatives in Fair Value Hedging Relationships	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	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)
	Three Months Ended December 31,																Three Months Ended December 31,
	2023												2023			2022		2023	2022
		Three Months Ended March 31,					Three Months Ended March 31,
		2023		2022			2023		2022

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

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


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)				Derivatives in Fair Value Hedging Relationships	Amount of (Loss) 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)
	Six Months Ended December 31,														Six Months Ended December 31,				Six Months Ended December 31,
	2023												2023				2022	2023		2022
		Nine Months Ended March 31,					Nine Months Ended March 31,
		2023		2022			2023		2022

Cross-currency swaps
Cross-currency swaps
Cross-currency swaps	Cross-currency swaps	$	85	$	—	Interest and other financing expense, net / Other expense (income), net	$	367	$	—

The following table presents the pretax effect of the Company’s derivative financial instruments electing fair value hedge accounting on the Consolidated Statements of Operations for the three months ended ~~of March~~December 31, 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 Loss Recognized in the Consolidated Statement of Operations on Fair Value Hedging Relationships

Three Months Ended December 31, 2023

Three Months Ended December 31, 2022

Interest and other financing expense, net

The effects of fair value hedging:

Loss on fair value hedging relationships

Cross-currency swaps

Amount of loss reclassified from AOCL into income

(1,028)

(2,107)

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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~~six months ended ~~of March~~December 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)~~

—

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

Six Months Ended December 31, 2023

Six Months Ended December 31, 2022

Interest and other financing expense, net

The effects of fair value hedging:

Loss on fair value hedging relationships

Cross-currency swaps

Amount of loss reclassified from AOCL into income

(75)

(296)

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


Derivatives in Net Investment Hedging Relationships	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				Derivatives in Net Investment Hedging Relationships	Amount of Loss Recognized in AOCL on Derivatives		Location of Gain Recognized in Income on Derivatives	Amount of Gain Recognized in Income on Derivatives
		Three Months Ended March 31,					Three Months Ended March 31,
		2023		2022			2023		2022
	Three Months Ended December 31,																Three Months Ended December 31,
	2023												2023			2022		2023	2022
Cross-currency swaps	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~~six months ended ~~March~~December 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 (Loss) Gain Recognized in AOCL on Derivatives		Location of Gain Recognized in Income on Derivatives	Amount of Gain Recognized in Income on Derivatives
		Nine Months Ended March 31,					Nine Months Ended March 31,
		2023		2022			2023		2022
	Six Months Ended December 31,																Six Months Ended December 31,
	2023												2023			2022		2023	2022
Cross-currency swaps	Cross-currency swaps	$	335	$	5,836	Interest and other financing expense, net	$	1,474	$	413

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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16. 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 is primarily comprised of: contract termination costs, asset write-downs, employee-related costs and other transformation-related expenses.

For the three months ended December 31, 2023, expenses associated with the Company’s restructuring program in the amount of $20,666, $6,869, and $3,113, respectively, were recorded in Impairment of long-lived assets, Productivity and transformation costs, and Cost of sales, respectively, on the Consolidated Statements of Operations.

For the six months ended December 31, 2023, expenses associated with the Company’s restructuring program in the amount of $20,666, $13,272, and $6,433, respectively, were recorded in Impairment of long-lived assets, Productivity and transformation costs, and Cost of sales, respectively, on the Consolidated Statements of Operations.

The table below sets forth expenses associated with the Company’s restructuring program for the three and six months ended December 31, 2023 by reportable segment and Corporate and Other.


	Three Months Ended December 31, 2023		Six Months Ended December 31, 2023



North America	$	25,093	$	28,451
Corporate and Other	5,067		10,837
International	488		1,083


	$	30,648	$	40,371

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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 December 31, 2023:


	Charges		Amounts Paid		Non-cash settlements/ Adjustments2		Balance at December 31, 2023
Employee-related costs1	$	3,357	$	(723)	$	—	$	2,634
Contract termination costs	4,168		(4,168)		—		—
Asset write-downs2	22,806		—		(22,806)		—
Other transformation-related expenses3	10,040		(8,147)		—		1,893
	$	40,371	$	(13,038)	$	(22,806)	$	4,527

1Employee-related costs include $1,130 severance related to executive officer succession.

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

3Other transformation-related expenses primarily include consultancy charges.

17. COMMITMENTS AND CONTINGENCIES

Securities Class Actions Filed in Federal Court

On August 17, 2016, three securities class action complaints were filed in the Eastern District of New York (the ~~"District Court"~~“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:~~1934: (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,~~(collectively, 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~~The Securities Complaints were ultimately 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,~~During the summer of 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 Amended Complaintwas filed, which named as defendants the Company and certain of its former officers (collectively, “Defendants”) and asserted violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 based on allegedly materially false or misleading statements and omissions in public statements, press releases and SEC filings regarding the Company’s business, prospects, financial results and internal controls. ~~Defendants filed a~~

After Defendants’ initial motion to dismiss ~~the Amended Complaint on October 3, 2017 which the District Court~~was granted ~~on March 29, 2019, dismissing the case in its entirety,~~ without prejudice to ~~replead.~~replead in October 2017, the Co-Lead Plaintiffs filed a Second Amended Consolidated Class Action Complaint on May 6, 2019 (the “Second Amended Complaint”). The Second Amended Complaint again named as defendants the Company and certain of its former officers and ~~asserts~~asserted violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 based on allegations similar to those in the Correct Consolidated Amended Complaint, 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.Complaint. Defendants filed a motion to dismiss the Second Amended Complaint on June 20, 2019. On April 6, 2020, the District Court granted Defendants’ motion to dismiss the Second Amended Complaint in its entirety, with prejudice. Co-Lead Plaintiffs appealed the District Court’s decision dismissing the Second Amended Complaint to the United States Court of Appeals for the Second Circuit (the "Second Circuit"). By decision dated December 17, 2021, the Second Circuit vacated the District Court’s judgment and remanded the case for further proceedings. ~~On April 6, 2022, the District Court issued an order directing the~~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 partiesultimately submitted supplemental briefing between May 12, 2022 and June 23, ~~2022. In~~2022, and in June 2022, the District Court referred Defendants’ Motion to Dismiss the Second Amended Complaint to a United States Magistrate Judge (the “Magistrate Judge”) for a Report and Recommendation. On November 4, 2022, the Magistrate Judge issued a Report and Recommendation recommending that the District Court grant Defendants’ Motion to Dismiss the Second Amended Complaint with prejudice. 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 fromOn September 29, 2023, the District Court ongranted Defendants’ Motion to Dismiss the Second Amended Complaint. Co-Lead Plaintiffs filed notice of appeal on October 26, 2023, appealing the District Court’s decision dismissing the Second Amended Complaint to the Second Circuit. Co-Lead Plaintiffs’ opening brief is due February 12, 2024.

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~~The former Board of Directors and certain former officers of the Company are defendants in a consolidated action originally filed in 2017 in the Eastern District of New York under the captions Silva v. Simon, et al. ~~(the “Silva Complaint”) and~~, Barnes v. Simon, et al., Merenstein v. Heyer, et al., and Oliver v. Berke, et al. Plaintiffs in the consolidated action, In re The Hain Celestial Group, Inc. Stockholder Class and Derivative Litigation (the ~~“Barnes Complaint”~~“Consolidated Stockholder Class and Derivative Action”), ~~respectively. Both~~allege 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~~ The plaintiffs alleged in ~~the Eastern District of New York against the former Board of Directors and certain former officers of the Company. The complaint alleged~~their Amended Complaint that the Company’s former directors and certain former officers made materially false and misleading statements in press releases and SEC filings regarding the Company’s business, prospects and financial ~~results. The complaint also alleged~~results and that the Company violated

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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,~~ After the District Court ingranted Defendants’ motion to dismiss 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~~that action filed ~~the~~a Second Amended Complaint on May 6, 2019. The parties to the Consolidated Stockholder Class and Derivative Action thereby agreed to continue the stay of Defendants’ time to answer, move, or otherwise respond to the consolidated amended complaint through 30 days after a decision on ~~Defendants'~~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~~an agreed-upon stay, Defendants in the Consolidated Stockholder Class and Derivative Action had until May 6, 2020 to answer, move, or otherwise respond to the complaint in this matter. This deadline was extended, and Defendants moved to dismiss the Consolidated Stockholder Class and Derivative Action Complaint on June 23, 2020, with Plaintiffs’ opposition due August 7, 2020.

On July 24, 2020, Plaintiffs made a stockholder litigation demand on the current Board containing overlapping factual allegations to those set forth in the Consolidated Stockholder Class and Derivative Action. On 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~~parties have agreed to extend the ~~temporary~~ stay through ~~September 5, 2023.~~the earlier of November 8, 2024 or 30 days after the Second Circuit issues a decision on Plaintiffs’ appeal.

Baby Food Litigation

Since February 2021, the Company has been named in numerous consumer class actions alleging that the Company’s Earth’s Best® baby food products (the “Products”) contain unsafe and undisclosed levels of various naturally occurring heavy metals, namely lead, arsenic, cadmium and mercury. Those actions have now been transferred and consolidated as a single lawsuit in the U.S. District Court for the Eastern District of New York captioned In re Hain Celestial Heavy Metals Baby Food Litigation, Case No. 2:21-cv-678 (the ~~"Consolidated Proceeding"~~“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~~which was opposed by the ~~Company filed its reply brief on January 20, 2023. The Court scheduled a status conference for~~plaintiffs. 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.) (the “Beech-Nut Case”). Accordingly, the Court denied the Company’s ~~pending~~ motion to ~~dismiss.~~dismiss without prejudice to renew. By summary order dated January 18, 2024, the Second Circuit vacated the judgment dismissing the Beech-Nut Case and remanded for further proceedings. The District Court in the Consolidated Proceeding has now ordered the Company to serve its motion to dismiss by February 15, 2024. 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

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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.

In addition to the consumer class actions discussed above, the Company is currently named in ~~seven~~several 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~~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~~Plaintiffs’ appeal is fully briefed and oral argument took place before the Fifth Circuit ~~receives the District Court record within which to file their appellate brief, barring any extensions.~~on February 6, 2024.

•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~~judgment was entered on October 26, 2023 in favor of the defendants as a result of successful defense pretrial motions, including the Company’s motion for summary judgment. The time for appeal has ~~closed and 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, 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 and the case is set for trial starting on July 29, 2024. The parties have engaged in limited discovery. There has been no further activity in the Buenaventura case.passed.

•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. The parties have agreed to ask the Court to move the trial date to~~ no earlier than ~~March 2024 and have started to engage~~October 7, 2024. The parties 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. Defendants removed the case to the United States District Court for the District of Hawaii on January 5, 2024. The Court has set the case ~~is set~~ for trial ~~starting~~beginning on ~~January 23,~~October 21, 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 the Initial Status Conference on May 17, 2023.~~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 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.

Beginning in late November, an additional eleven cases have been filed in federal courts and in California state court including:

•Paul L. v. Hain Celestial Group, Inc. et al (filed October 10, 2023); Landon R. v. Hain Celestial Group, Inc. et al (filed October 11, 2023); Josue G. v. Hain Celestial Group, Inc. et al. (filed November 28, 2023); Princeton N.C. v. Hain Celestial Group, Inc. et al. (filed November 28, 2023); and Kaleb R. v. Hain Celestial Group, Inc. et al. (filed December 13, 2023), each pending in the Superior Court for the State of California, County of Los Angeles against Hain and several other baby food manufacturers alleging bodily injury as to one child in each action. These cases are in their earliest stages and a joint status conference was held on February 6, 2024.

•M.H. v. Hain Celestial Group, Inc. et al. (filed November 22, 2023) and D.S. v. Hain Celestial Group, Inc. et al. (filed December 4, 2023), each pending in the United States District Court for the Central District of California against Hain and several other baby food manufacturers alleging bodily injury as to one child in each action.

•Samuel R. v. Hain Celestial Group, Inc. et al. (filed November 28, 2023) in the Superior Court for the State of California, County of Alameda; Clark v. Hain Celestial Group, Inc. et al. (filed December 13, 2023) in the United States District Court for the District of Arizona; and Mosley v. Hain Celestial Group, Inc. et al. (filed December 21, 2023) in the United States District Court for the Western District of Washington are pending against Hain and several other baby food manufacturers alleging bodily injury as to one child in each action.

•A.A. and M.A. v. Hain Celestial Group, Inc. et al. (filed November 22, 2023), in the United States District Court for the Northern District of California, is pending against Hain and several other baby food manufacturers alleging bodily injury as to two children.

On January 4, 2024, Plaintiffs filed a Motion to Transfer Actions Pursuant to 28 U.S.C. § 1407 for Coordinated or Consolidated Pretrial Proceedings in respect of each of the above referenced eleven matters. Defendants’ response is currently due on February 13, 2024.

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

SEC Investigation

In November 2023, the staff of the SEC informed the Company it was conducting an investigation relating to Hain Celestial and requested documents primarily concerning (i) the Company’s acquisition of one business and disposition of another business and certain related accounting matters and (ii) trading activity and other matters related to the Company’s earnings guidance in certain previous fiscal years. The Company is cooperating with the SEC in this investigation.

Other

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

With respect to all litigation and related matters, the Company records a liability when the Company believes it is probable that a liability has been incurred and the amount can be reasonably estimated. As of the end of the period covered by this report, the Company has not recorded a liability for any of the matters disclosed in this note. It is possible that some matters could require the Company to pay damages, incur other costs or establish accruals in amounts that could not be reasonably estimated as of the end of the period covered by this report.

~~17.~~18. SEGMENT INFORMATION

~~Our organization~~The Company’s organizational structure consists of two ~~geographic-based~~geographic based reportable segments: North America and ~~International. Our North America reportable segment consists of~~International, which are also 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~~the Company’s Chief Operating Decision Maker (“CODM”) assesses the ~~Company's Chief Executive Officer, assesses our~~Company’s performance and allocates resources.

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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: net interest expense, (benefit) provision for income ~~excludes~~taxes, depreciation and amortization, equity in net loss of equity-method investees, stock-based compensation, net, unrealized currency (gains) losses, 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, (gain) loss on sale of assets, certain inventory write-downs related to exited categories, 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.

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


		Three Months Ended December 31,								Three Months Ended December 31,			Six Months Ended December 31,
		2023							2023		2022	2023		2022
Net Sales:
North America
North America
North America
International
		$

Adjusted EBITDA:
Adjusted EBITDA:
Adjusted EBITDA:
North America
North America
North America
International
Total Reportable Segments Adjusted EBITDA
Corporate and Other
		47,126
Depreciation and amortization
Equity in net loss of equity-method investees
Interest expense, net
Benefit (provision) for income taxes
Stock-based compensation, net
Unrealized currency gains (losses)
Certain litigation expenses, net(a)
Restructuring activities
Productivity and transformation costs
Productivity and transformation costs
Productivity and transformation costs
Plant closure related costs, net
Warehouse/manufacturing consolidation and other costs, net
CEO succession
Acquisitions, divestitures and other
Transaction and integration costs, net
Transaction and integration costs, net
Transaction and integration costs, net
Gain (loss) on sale of assets
Impairment charges
Long-lived asset impairment
Long-lived asset impairment
Long-lived asset impairment
Inventory write-downs related to exited categories

	Three Months Ended March 31,				Nine Months Ended March 31,
	2023		2022		2023		2022
Net Sales:
North America	$	286,649	$	325,742	$	857,406	$	866,281
International	168,594		177,197		491,396		568,502
Net (loss) income

	$	455,243	$	502,939	$	1,348,802	$	1,434,783

Operating (Loss) Income:
North America(a)	$	(136,127)	$	28,526	$	(79,420)	$	72,530
International	13,604		18,303		33,219		69,740
	(122,523)		46,829		(46,201)		142,270
Corporate and Other(b)	(18,403)		(11,665)		(51,513)		(49,538)
Net (loss) income
	$	(140,926)	$	35,164	$	(97,714)	$	92,732

Net (loss) income

(a) ~~North America operating loss includes non-cash impairment charges of $156,298 related~~Expenses and items relating to ~~ParmCrisps~~®securities class action 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).~~baby food litigation.

~~(b)~~Table of 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.Contents

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 December 31,				Six Months Ended December 31,
	2023		2022		2023		2022
United States	$	239,324	$	255,056	$	469,983	$	514,564
United Kingdom	138,628		123,578		259,679		232,738
Europe	47,801		48,268		91,725		90,063
Canada	28,347		27,306		57,742		56,194
	$	454,100	$	454,208	$	879,129	$	893,559

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~~December 31, 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~~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®.

Hain Reimagined Program

During the first quarter of fiscal year 2024, we initiated a multi-year growth and 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 targeted growth initiatives, brand building and other capabilities critical to delivering future growth. Hain Reimagined is grounded on four strategic pillars:

•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 – United States, Canada, UK, Ireland, and Europe – and align our global operating model and footprint, leveraging scale and realizing synergies across the business.

•Grow

◦Deliver share gain in key platforms where we have the most compelling right to win, through expanded channel reach and acceleration in its innovation pipeline.

•Build

◦Enhance critical capabilities in brand building and effectiveness of marketing spend; expand reach across under-penetrated margin-accretive channels such as away-from-home and omni-channel e-commerce; and enhance our innovation capability to be more leading edge in BFY.

•Fuel

◦Drive revenue growth management, working capital management and operational efficiency to fund growth and enhance margins.

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. For the three and six months ended December 31, 2023, we incurred approximately $31 million and $40 million, respectively, of expenses associated with the Company’s restructuring program. Annualized pretax savings are expected to be $130 million - $150 million.

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Global Economic Environment

~~Economic conditions during fiscal year 2022~~The duration and intensity of inflation fluctuations, the ~~first nine months~~possibility of ~~fiscal year 2023 have been marked by inflationary pressures, rising interest rates~~an impending recession, alterations in consumer shopping and consumption patterns, and shifts in ~~consumer demand.~~

•~~Inflation~~ ~~– The inflationary environment has led~~geopolitical events, such as the ongoing Russia-Ukraine conflict and the recent Gaza Strip conflict, may lead to increased supply chain expenses, higher ~~costs for ingredients, packaging, energy, transportation~~inflation, and other ~~supply chain components.~~business impacts. We ~~expect this higher cost environment to continue, although we expect~~continually assess the nature and extent of these ~~higher costs to be partially mitigated by pricing actions we have implemented to date~~potential and ~~further pricing actions that we may implement.~~

•~~Interest Rates~~ – Loans under our credit agreement bear interest at a variable rate, and the interest rate on our outstanding indebtedness has increased as market interest rates have risen significantly starting 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.

•~~Consumer Demand~~ – Recent economic conditions have resulted in changes in consumer spending patterns, which has had an impact on our sales. During an economic downturn, factors such as increased unemployment, decreases in disposable income and declines in consumer confidence can cause changes in consumer spending behavior. Economic conditions have prompted some consumers, particularly in Europe, to shift to lower-priced products.

~~Russia-Ukraine War~~

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 theevolving impacts ~~of the war~~ on our business, ~~the extent to which the Russia-Ukraine war~~consolidated operational results, liquidity, 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~~

On November 22, 2022, the Board of Directors (the "Board") of the Company 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. 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~~December 31, 2023 to Three Months Ended ~~March~~December 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 three months ended ~~March~~December 31, 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			December 31, 2023						December 31, 2022									Dollars					Percentage
Net sales	Net sales	$	455,243	100.0%	$	502,939	100.0%	$	(47,696)	(9.5)%	Net sales		$	454,100		100.0%		100.0%				$	454,208		100.0%				100.0%					$	(108)			—%			—%
Cost of sales	Cost of sales	357,764		78.6%	387,236		77.0%	(29,472)		(7.6)%	Cost of sales		351,885			77.5%		77.5%				350,351			77.1%				77.1%					1,534				0.4%			0.4%
Gross profit	Gross profit	97,479		21.4%	115,703		23.0%	(18,224)		(15.8)%	Gross profit		102,215			22.5%		22.5%				103,857			22.9%				22.9%					(1,642)				(1.6)%			(1.6)%
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		73,952			16.3%		16.3%				72,357			15.9%				15.9%					1,595				2.2%			2.2%
Intangibles and long-lived asset impairment		156,583		34.4%	—		—%	156,583		*
Long-lived asset impairment											Long-lived asset impairment		20,666				4.6%			340						0.1%				20,326									**
Productivity and transformation costs											Productivity and transformation costs		6,869				1.5%			986						0.2%				5,883									596.7%
Amortization of acquired intangible assets											Amortization of acquired intangible assets		1,509				0.3%			2,785						0.6%				(1,276)									(45.8)%

Amortization of acquired intangible assets		2,842		0.6%	3,110		0.6%	(268)		(8.6)%
Productivity and transformation costs		3,933		0.9%	1,679		0.3%	2,254		134.2%

Operating (loss) income

Operating (loss) income

Operating (loss) income	Operating (loss) income	(140,926)		(31.0)%	35,164		7.0%	(176,090)		(500.8)%	(781)				(0.2)%		(0.2)%			27,389				6.0%			6.0%					(28,170)				(102.9)%				(102.9)%
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		16,138			3.6%		3.6%				10,812			2.4%				2.4%					5,326				49.3%			49.3%
Other expense (income), net		439		0.1%	(712)		(0.1)%	1,151		(161.7)%
Other income, net											Other income, net		(42)				—%			(1,062)						(0.2)%				1,020									(96.0)%
(Loss) income before income taxes and equity in net loss of equity-method investees	(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)%	(Loss) income before income taxes and equity in net loss of equity-method investees		(16,877)			(3.7)%		(3.7)%				17,639			3.9%				3.9%					(34,516)				*			*
(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		(4,249)			(0.9)%		(0.9)%				6,357			1.4%				1.4%					(10,606)				*			*
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		907			0.2%		0.2%				316			0.1%				0.1%					591				187.0%			187.0%

Net (loss) income	Net (loss) income	$	(115,727)	(25.4)%	$	24,531	4.9%	$	(140,258)	(571.8)%

Net (loss) income

Net (loss) income													$	(13,535)			(3.0)%			$	10,966					2.4%				$	(24,501)								*

Adjusted EBITDA
Adjusted EBITDA
Adjusted EBITDA	Adjusted EBITDA	$	37,260	8.2%	$	58,669	11.7%	$	(21,409)	(36.5)%	$	47,126			10.4%		10.4%			$	49,817			11.0%			11.0%					$	(2,691)			(5.4)%				(5.4)%

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

Diluted net (loss) income per common share													$	(0.15)									$	0.12												$	(0.27)				*

* 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.

Net Sales

Net sales for the three months ended ~~March~~December 31, 2023 were ~~$455.2~~$454.1 million, a decrease of ~~$47.7~~$0.1 million, or ~~9.5%,~~flat, as compared to ~~$502.9~~$454.2 million infor the three months ended ~~March~~December 31, 2022. ~~On a constant currency basis,~~Net sales, adjusted for the impact of ~~acquisitions,~~ divestitures and discontinued brands, ~~net sales decreased~~increased approximately ~~$28.9~~$1.0 million, or ~~5.8%~~0.2%, from the prior year quarter ~~driven~~due to growth in the International reportable segment, mostly offset by ~~both~~a decline in the North America ~~and International~~ reportable ~~segments.~~segment. The effect of fluctuations in foreign currency exchange rates increased net sales by $10.0 million. 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~~December 31, 2023 was ~~$97.5~~$102.2 million, a decrease of ~~$18.2~~$1.6 million, or ~~15.8%~~1.6%, as compared to the prior year quarter. Additionally, gross profit margin of ~~21.4%~~22.5% was slightly lower when compared with ~~23.0%~~22.9% 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~~well as by inflation and recognition of ~~lower net sales, changes~~charges in ~~sales mix~~the three months ended December 31, 2023 associated with the consolidation of ~~high margin products~~facilities, partially offset by improvements in 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.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were ~~$75.0~~$74.0 million for the three months ended ~~March~~December 31, 2023, ~~a decrease~~an increase of ~~$0.7~~$1.6 million, or ~~0.9%~~2.2%, from ~~$75.8~~$72.4 million for the prior year quarter. The ~~decrease~~increase was ~~driven by lower~~primarily due to higher marketing ~~costs as well as efficiencies gained from the Company's productivity~~expenses and ~~transformation initiatives, partially offset by higher labor-related expenses primarily~~an increase in ~~Corporate.~~employee compensation-related expenses.

~~Intangibles and long-lived~~Long-lived asset impairment

During the three months ended ~~March~~December 31, 2023, the Company recognized ~~an aggregate~~a non-cash impairment charge of ~~$156.6~~$20.7 million ~~primarily~~due to a decline in actual and projected performance and cash flows related to an asset group primarily comprised of certain production assets in 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.North America reportable segment. See Note 8,6, ~~Goodwill~~Property, Plant and ~~Other Intangible Assets~~Equipment, Net, and Note 14, Fair Value Measurements, in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

~~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 and the United Kingdom operating segments when compared with the prior year quarter.

Productivity and Transformation Costs

Productivity and transformation costs were ~~$3.9~~$6.9 million for the three months ended ~~March~~December 31, 2023, an increase of ~~$2.3~~$5.9 million from ~~$1.7~~$1.0 million in the prior year quarter. The increase was primarily due to ~~increased spending related~~the recognition of restructuring costs incurred in connection with the Hain Reimagined Program.

Amortization of Acquired Intangible Assets

Amortization of acquired intangibles was $1.5 million for the three months ended December 31, 2023, a decrease of $1.3 million from $2.8 million in the prior year quarter, primarily reflecting reduced amortization expenses due to ~~productivity and transformation strategy consulting costs as a part~~impairment of the ~~Company’s strategic plan update.~~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.

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

Operating loss for the three months ended ~~March~~December 31, 2023 was ~~$140.9~~$0.8 million compared to operating income of ~~$35.2~~$27.4 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~~$16.1 million for the three months ended ~~March~~December 31, 2023, an increase of ~~$10.2~~$5.3 million, or ~~316.3%~~49.3%, from ~~$3.2~~$10.8 million in the prior year quarter. The increase resulted primarily from ~~rising interest~~higher borrowing rates, ~~and~~partially offset by a ~~higher~~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, 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 million~~was not significant for the three months ended ~~March~~December 31, 2023, compared to income of ~~$0.7~~$1.1 million in the prior year quarter. The decrease in other income, net 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 Before Income Taxes and Equity in Net Loss of Equity-Method Investees

Loss before income taxes and equity in net loss of our equity-method investees for the three months ended ~~March~~December 31, 2023 was ~~$154.8~~$16.9 million compared to income of ~~$32.7~~$17.6 million in the prior year quarter. The ~~decrease~~change 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~~$4.2 million for the three months ended ~~March~~December 31, 2023 compared to income tax expense of ~~$7.7~~$6.4 million in the prior year quarter.

The effective income tax rate was a benefit of ~~25.6%~~25.2% and an expense of ~~23.7%~~36.0% for the three months ended ~~March~~December 31, 2023 and 2022, respectively. The effective income tax rate for the three months ended ~~March~~December 31, 2023 was impacted by ~~ParmCrisps~~® ~~and Thinsters~~® ~~trademarks and ParmCrisps~~® ~~asset group impairment charges,~~tax expense related to stock-based compensation, global intangible low-taxed income (“GILTI”), and ~~changes in uncertain tax positions.~~limitations on the deductibility of executive compensation. The effective income tax rate for the three months ended ~~March~~December 31, 2022 was impacted by ~~deductions related~~the gain on the sale of Westbrae Natural® brand (“Westbrae”), an operating lease modification during the second quarter, severance with respect to our former CEO (as part of the limitation on the deductibility of executive compensation), stock-based compensation and ~~the finalization of fiscal year 2021 income~~uncertain tax ~~returns.~~positions. 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~~December 31, 2023 was ~~$0.5~~$0.9 million and ~~$0.4~~$0.3 million in the prior year quarter. 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 three months ended ~~March~~December 31, 2023 was ~~$115.7~~$13.5 million, or ~~$1.29~~$0.15 per diluted share, compared to net income of ~~$24.5~~$11.0 million, or ~~$0.27~~$0.12 per diluted share, in the prior year quarter. The change was attributable to the factors noted above.

Adjusted EBITDA

Our Adjusted EBITDA was ~~$37.3~~$47.1 million and ~~$58.7~~$49.8 million for the three months ended ~~March~~December 31, 2023 and 2022, respectively, as a result of the factors ~~discuss~~eddiscussed 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~~Segment Results

Our organizational structure consists of two geographic based reportable segments: North America and ~~Other~~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.

~~Our~~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 (gains) losses, certain 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, (gain) loss on sale of assets, certain inventory write-downs related to exited categories, long-lived asset impairments and other adjustments. In addition, Segment Adjusted EBITDA does not include Corporate and Other ~~category consists of~~ expenses related to the Company’s centralized administrative functions, which do not specifically relate to ~~an operating~~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, ~~as well as~~litigation expense and expenses for certain professional fees, ~~acquisition and divestiture transaction costs,~~ facilities, and other items which benefit the Company as a whole. ~~Our~~We do not allocate amounts below operating ~~loss in Corporate~~(loss) income to our reportable segments.

The following table provides a summary of net sales and ~~Other~~Adjusted EBITDA by reportable segment for the three months ended ~~March~~December 31, 2023 and 2022:


(dollars in thousands)	North America			International			Corporate and Other			Consolidated
Net sales
Three months ended 12/31/23	$	267,671		$	186,429		$	—		$	454,100
Three months ended 12/31/22	282,361			171,847			—			454,208
$ change	$	(14,690)		$	14,582		n/a			$	(108)
% change	(5.2)		%	8.5		%	n/a			—		%

Adjusted EBITDA
Three months ended 12/31/23	$	31,218		$	25,969		$	(10,061)		$	47,126
Three months ended 12/31/22	38,510			19,242			(7,935)			49,817
$ change	$	(7,292)		$	6,727		$	(2,126)		$	(2,691)
% change	(18.9)		%	35.0		%	(26.8)		%	(5.4)		%

Adjusted EBITDA margin
Three months ended 12/31/23	11.7		%	13.9		%	n/a			10.4		%
Three months ended 12/31/22	13.6		%	11.2		%	n/a			11.0		%

See the Reconciliation of Non-U.S. GAAP Financial Measures to U.S. GAAP Measures following the discussion of our results of operations and Note 18, Segment Information, in the Notes to 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 three months ended December 31, 2023 were $267.7 million, a decrease of $14.7 million, or 5.2%, from net sales of $282.4 million in the prior year quarter. The decrease in net sales was primarily due to lower sales in the baby/kids category on account of continued industry-wide challenges in organic formula supply, as well as by a decline in the snacks category as we shifted our promotional strategy and optimized our channel mix for improved trade efficiency and profitability, partially offset by growth in the beverages category.

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Adjusted EBITDA for the three months ended December 31, 2023 was ~~$18.4~~$31.2 million, a decrease of $7.3 million, or 18.9%, from Adjusted EBITDA of $38.5 million in the prior year quarter. The decrease was primarily driven by reduced gross profit reflecting lower sales volume and the impact of inflation, partially offset by improvements in productivity. The decline in Adjusted EBITDA also reflected higher selling, general and administrative expenses primarily associated with increased marketing investments. Adjusted EBITDA margin was 11.7%, a 190-basis point decrease from the prior year period.

International

Net sales in the International reportable segment for the three months ended December 31, 2023 were $186.4 million, an increase of $14.6 million, or 8.5%, from net sales of $171.8 million in the prior year quarter. The net sales increase was mainly driven by growth in the meal preparation and beverages categories due to pricing and strong private label performance. The increase also reflected 5.8% of growth from the favorable impact of foreign exchange.

Adjusted EBITDA for the three months ended December 31, 2023 was $26.0 million, an increase of $6.7 million, or 35.0%, from ~~$11.7~~Adjusted EBITDA of $19.2 million ~~for~~in the ~~three months ended March 31, 2022. This change~~prior year quarter. The increase was primarily driven by an increase in gross profit reflecting higher net sales due to ~~higher strategic consulting charges~~pricing, partially offset by lower volumes and ~~employee related expenses.~~inflation. Adjusted EBITDA margin was 13.9%, a 270-basis point increase from the prior year period.

Corporate and Other

The increase in Corporate and Other expenses primarily reflected an increase in consulting charges. Refer to Note ~~17,~~18, Segment Information, in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

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Comparison of ~~Nine~~Six Months Ended ~~March~~December 31, 2023 to ~~Nine~~Six Months Ended ~~March~~December 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~~six months ended ~~March~~December 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					Six Months Ended													Change in
		March 31, 2023			March 31, 2022			Dollars		Percentage			December 31, 2023						December 31, 2022									Dollars					Percentage
Net sales	Net sales	$	1,348,802	100.0%	$	1,434,783	100.0%	$	(85,981)	(6.0)%	Net sales		$	879,129		100.0%		100.0%				$	893,559		100.0%				100.0%					$	(14,430)			(1.6)%			(1.6)%
Cost of sales	Cost of sales	1,053,131		78.1%	1,096,367		76.4%	(43,236)		(3.9)%	Cost of sales		692,971			78.8%		78.8%				695,367			77.8%				77.8%					(2,396)				(0.3)%			(0.3)%
Gross profit	Gross profit	295,671		21.9%	338,416		23.6%	(42,745)		(12.6)%	Gross profit		186,158			21.2%		21.2%				198,192			22.2%				22.2%					(12,034)				(6.1)%			(6.1)%
Selling, general and administrative expenses	Selling, general and administrative expenses	222,355		16.5%	229,679		16.0%	(7,324)		(3.2)%	Selling, general and administrative expenses		151,121			17.2%		17.2%				147,308			16.5%				16.5%					3,813				2.6%			2.6%
Intangibles and long-lived asset impairment		156,923		11.6%	303		—%	156,620		**
Long-lived asset impairment											Long-lived asset impairment		21,360				2.4%			340						—%				21,020									**
Productivity and transformation costs											Productivity and transformation costs		13,272				1.5%			1,759						0.2%				11,513									654.5%
Amortization of acquired intangible assets	Amortization of acquired intangible assets	8,415		0.6%	7,254		0.5%	1,161		16.0%	Amortization of acquired intangible assets		3,464			0.4%		0.4%				5,573			0.6%				0.6%					(2,109)				(37.8)%			(37.8)%
Productivity and transformation costs		5,692		0.4%	8,448		0.6%	(2,756)		(32.6)%

Operating (loss) income

Operating (loss) income

Operating (loss) income	Operating (loss) income	(97,714)		(7.2)%	92,732		6.5%	(190,446)		*	(3,059)				(0.3)%		(0.3)%			43,212				4.8%			4.8%					(46,271)				*				*
Interest and other financing expense, net	Interest and other financing expense, net	31,910		2.4%	7,672		0.5%	24,238		315.9%	Interest and other financing expense, net		29,382			3.3%		3.3%				18,489			2.1%				2.1%					10,893				58.9%			58.9%
Other income, net	Other income, net	(2,413)		(0.2)%	(10,570)		(0.7)%	8,157		(77.2)%	Other income, net		(307)			—%		—%				(2,852)			(0.3)%				(0.3)%					2,545				(89.2)%			(89.2)%
(Loss) income before income taxes and equity in net loss of equity-method investees	(Loss) income before income taxes and equity in net loss of equity-method investees	(127,211)		(9.4)%	95,630		6.7%	(222,841)		*	(Loss) income before income taxes and equity in net loss of equity-method investees		(32,134)			(3.7)%		(3.7)%				27,575			3.1%				3.1%					(59,709)				*			*
(Benefit) provision for income taxes	(Benefit) provision for income taxes	(30,599)		(2.3)%	19,425		1.4%	(50,024)		*	(Benefit) provision for income taxes		(9,628)			(1.1)%		(1.1)%				8,988			1.0%				1.0%					(18,616)				*			*
Equity in net loss of equity-method investees	Equity in net loss of equity-method investees	1,226		0.1%	1,374		0.1%	(148)		(10.8)%	Equity in net loss of equity-method investees		1,405			0.2%		0.2%				698			0.1%				0.1%					707				101.3%			101.3%

Net (loss) income	Net (loss) income	$	(97,838)	(7.3)%	$	74,831	5.2%	$	(172,669)	*

Net (loss) income

Net (loss) income													$	(23,911)			(2.7)%			$	17,889					2.0%				$	(41,800)								*

Adjusted EBITDA
Adjusted EBITDA
Adjusted EBITDA	Adjusted EBITDA	$	123,106	9.1%	$	165,249	11.5%	$	(42,143)	(25.5)%	$	71,216			8.1%		8.1%			$	85,846			9.6%			9.6%					$	(14,630)			(17.0)%				(17.0)%

Diluted net (loss) income per common share	Diluted net (loss) income per common share	$	(1.09)		$	0.79		$	(1.88)	*

Diluted net (loss) income per common share

Diluted net (loss) income per common share													$	(0.27)									$	0.20												$	(0.47)				*

* 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~~

period.

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Net Sales

Net sales for the ~~nine~~six months ended ~~March~~December 31, 2023 were ~~$1,348.8~~$879.1 million, a decrease of ~~$86.0~~$14.4 million, or ~~6.0%~~1.6%, as compared to ~~$1,434.8~~$893.6 million infor the ~~nine~~six months ended ~~March~~December 31, 2022. ~~On a constant currency basis,~~Net sales, adjusted for the impact of ~~acquisitions,~~ divestitures and discontinued brands, ~~net sales~~ decreased approximately ~~$44.2~~$11.5 million, or ~~3.1%~~1.3%, from the prior comparable period ~~primarily driven~~due to a decline in the North America reportable segment, partially offset by growth in the International reportable segment. The effect of fluctuations in foreign currency exchange rates increased net sales by $20.8 million. Further details of changes in net sales by segment are provided below in the Segment Results section.

Gross Profit

Gross profit for the ~~nine~~six months ended ~~March~~December 31, 2023 was ~~$295.7~~$186.2 million, a decrease of ~~$42.7~~$12.0 million, or ~~12.6%~~6.1%, as compared to the prior year comparable period. Gross profit margin was ~~21.9%~~21.2% of net sales, compared to ~~23.6%~~22.2% in the prior year comparable period.

The decrease in gross profit was driven primarily by the ~~International~~North America reportable segment, mainly due to lower ~~net~~ sales ~~in the Europe~~volume as well as by inflation, partially offset by pricing and ~~United Kingdom operating segments and higher energy and supply chain costs when compared to the prior year period.~~productivity. The ~~North America~~International reportable segment had an increase in gross profit ~~remained relatively flat due to pricing increases and cost improvements~~mainly 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.~~due to pricing.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were ~~$222.4~~$151.1 million for the ~~nine~~six months ended ~~March~~December 31, 2023, ~~a decrease~~an increase of ~~$7.3~~$3.8 million, or ~~3.2%~~2.6%, from ~~$229.7~~$147.3 million for the prior year comparable period. The ~~decrease~~increase was ~~primarily driven by reductions in the United States~~due to higher selling and ~~the United Kingdom operating segments. The decrease reflected reduced broker fees~~marketing expenses 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.~~higher employee compensation-related expenses.

~~Intangibles and long-lived~~Long-lived asset impairment

During the ~~nine~~six months ended ~~March~~December 31, 2023, the Company recognized aggregate impairment ~~charge~~charges of ~~$156.9~~$21.4 million, , an increase of ~~$156.6~~$21.0 million from $0.3 million in the prior year comparable ~~period,~~period. Results for the six months ended December 31, 2023 included the recognition of a $20.7 million charge related to a decline in actual and projected performance and cash flows related to an asset group primarily comprised of certain production assets in 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.North America reportable segment. See Note 8,6, ~~Goodwill~~Property, Plant and ~~Other Intangible Assets~~Equipment, Net, and Note 14, Fair Value Measurements, in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

~~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~~$13.3 million for the ~~nine~~six months ended ~~March~~December 31, 2023, ~~a decrease~~an increase of ~~$2.8~~$11.5 million from ~~$8.4~~$1.8 million in the prior year comparable period. The ~~decrease~~increase was primarily due to ~~wind down~~the recognition of restructuring costs incurred in connection with the Hain Reimagined Program.

Amortization of Acquired Intangible Assets

Amortization of acquired intangibles was $3.5 million for the six months ended December 31, 2023, a decrease of $2.1 million from $5.6 million in the prior year ~~restructuring costs partially offset by new spending on our strategic plan update.~~comparable period, 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.

Operating (Loss) Income

Operating loss for the ~~nine~~six months ended ~~March~~December 31, 2023 was ~~$97.7~~$3.1 million compared to operating income of ~~$92.7~~$43.2 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~~$29.4 million for the ~~nine~~six months ended ~~March~~December 31, 2023, an increase of ~~$24.2~~$10.9 million, or ~~315.9%~~58.9%, from ~~$7.7~~$18.5 million in the prior year comparable period. The increase resulted primarily from higher borrowing rates, partially offset by a ~~higher~~lower 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 year 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.

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Other Income, Net

Other income, net totaled ~~$2.4~~$0.3 million for the ~~nine~~six months ended ~~March~~December 31, 2023, compared to ~~$10.6~~$2.9 million in the prior year comparable period. The decrease in other income, net 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.~~lower unrealized foreign currency gains.

(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~~six months ended ~~March~~December 31, 2023 was ~~$127.2~~$32.1 million compared to income of ~~$95.6~~$27.6 million in the prior year comparable period. The decrease was due to the items discussed above.

(Benefit) Provision for Income Taxes

The (benefit) provision for income taxes includes federal, foreign, state and local income taxes. Our income tax benefit was ~~$30.6~~$9.6 million for the ~~nine~~six months ended ~~March~~December 31, 2023 compared to income tax expense of ~~$19.4~~$9.0 million in the prior year comparable period.

The effective income tax rate was a benefit of ~~24.1%~~30.0% and an expense of ~~20.3%~~32.6% for the ~~nine~~six months ended ~~March~~December 31, 2023 and 2022, respectively.

The effective income tax rate for the ~~nine~~six months ended ~~March~~December 31, 2023 was impacted by ~~ParmCrisps~~®tax expense related to stock-based compensation, GILTI, and ~~Thinsters~~® ~~trademarks and ParmCrisps~~® ~~asset group impairment charges,~~limitations on the deductibility of executive compensation. The effective income tax rate for the six months ended December 31, 2022 was impacted by the 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~~six months ended ~~March~~December 31, 2023 was ~~$1.2~~$1.4 million compared to ~~$1.4~~$0.7 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~~six months ended ~~March~~December 31, 2023 was ~~$97.8~~$23.9 million, or ~~$(1.09)~~$0.27 per diluted share, compared to income of ~~$74.8~~$17.9 million, or ~~$0.79~~$0.20 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~~$71.2 million and ~~$165.2~~$85.8 million for the ~~nine~~six months ended ~~March~~December 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 $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.

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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~~six months ended ~~March~~December 31, 2023 and 2022:


(dollars in thousands)	North America			International			Corporate and Other			Consolidated
Net sales
Six months ended 12/31/23	$	527,725		$	351,404		$	—		$	879,129
Six months ended 12/31/22	570,757			322,802			—			893,559
$ change	$	(43,032)		$	28,602		n/a			$	(14,430)
% change	(7.5)		%	8.9		%	n/a			(1.6)		%

Adjusted EBITDA
Six months ended 12/31/23	$	49,945		$	43,407		$	(22,136)		$	71,216
Six months ended 12/31/22	69,291			34,189			(17,634)			85,846
$ change	$	(19,346)		$	9,218		$	(4,502)		$	(14,630)
% change	(27.9)		%	27.0		%	(25.5)		%	(17.0)		%

Adjusted EBITDA margin
Six months ended 12/31/23	9.5		%	12.4		%	n/a			8.1		%
Six months ended 12/31/22	12.1		%	10.6		%	n/a			9.6		%

(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 18, 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~~six months ended ~~March~~December 31, 2023 were ~~$857.4~~$527.7 million, a decrease of ~~$8.9~~$43.0 million, or ~~1.0%~~7.5%, from net sales of ~~$866.3~~$570.8 million in the prior year comparable period. ~~On a constant currency basis, adjusted for the impact of acquisitions, divestitures and discontinued brands,~~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 ~~personal care product categories~~the baby/kids category on account of continued industry-wide challenges in organic formula supply, a decline in the snacks category associated with more focused promotional activities and ~~reduced club distribution and programming for certain brands, partially offset by increased~~an optimized channel strategy as well as lower sales in the ~~United States operating segment due to stronger sales in snacks. Operating loss in North America~~meal preparation and personal care categories.

Adjusted EBITDA for the ~~nine~~six months ended ~~March~~December 31, 2023 was ~~$79.4~~$49.9 million, ~~compared to operating income~~a decrease of ~~$72.5~~$19.3 million, or 27.9%, from Adjusted EBITDA of $69.3 million in the prior year comparable period. The decrease was ~~mainly~~primarily driven by ~~ParmCrisps~~® ~~and Thinsters~~® ~~indefinite-lived trademarks and ParmCrisps~~® ~~definite-lived customer relationships impairment charges and lower~~reduced gross profit reflecting the reduction in net sales discussed above, inflation and an increase in ~~the Canada operating segment,~~certain inventory obsolescence reserves, partially offset by ~~cost~~ improvements ~~due to~~in productivity. The decline in Adjusted EBITDA also reflected higher ~~productivity.~~selling, general and administrative expenses primarily associated with increased marketing investments. Adjusted EBITDA margin was 9.5%, a 260-basis point decrease from the prior year period.

International

~~Our net~~Net sales in the International reportable segment for the ~~nine~~six months ended ~~March~~December 31, 2023 were ~~$491.4~~$351.4 million, ~~a decrease~~an increase of ~~$77.1~~$28.6 million, or ~~13.6%~~8.9%, from net sales of ~~$568.5~~$322.8 million in the prior year comparable period. ~~On a constant~~The increase reflected 6.7% of growth from the favorable impact of foreign currency ~~basis,~~exchange rates. The remainder of the net sales ~~decreased 2.3%~~increase was mainly driven by growth in the meal preparation and beverages categories due to pricing and strong private label performance.

Adjusted EBITDA for the six months ended December 31, 2023 was $43.4 million, an increase of $9.2 million, or 27.0%, from Adjusted EBITDA of $34.2 million in the prior year comparable period. The increase was primarily driven by an increase in gross profit reflecting higher net sales due to pricing, partially offset by inflation and an increase in selling, general and administrative expenses primarily due to increase in employee compensation-related expenses. Adjusted EBITDA margin was 12.4%, a 180-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~~period.

Table 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.Contents

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

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 9, Debt and Borrowings, in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of 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, 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 ~~$1,100.0~~$1,100 million in the aggregate, consisting of (1) ~~$300.0~~$300 million in aggregate principal amount of term loans (the “Term Loans”) and (2) an ~~$800.0~~$800 million senior secured revolving credit facility (which includes borrowing capacity available for letters of credit, and is comprised of a ~~$440.0~~$440 million U.S. revolving credit facility and ~~$360.0~~$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) ~~the Secured Overnight Financing Rate,~~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%~~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.~~Agreement as amended by the Second Amendment. The weighted average interest rate on outstanding borrowings under the Credit Agreement at ~~March~~December 31, 2023 was ~~5.90%~~7.90%. 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.

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~~December 31, 2023, there were $~~567.0~~526,000 ~~million~~ of loans under the Revolver, ~~$290.6 million~~$285,000 of Term Loans, and $~~4.1 million~~3,188 letters of credit outstanding under the Credit Agreement. As of ~~March~~December 31, 2023, ~~$228.9 million~~$270,812 was available under the Credit Agreement, subject to compliance with the financial ~~covenants, as compared to $204.0 million as of June 30, 2022.~~covenants. As of ~~March~~December 31, 2023, the Company was in compliance with all associated covenants.

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Our cash and cash equivalents balance ~~decreased $21.8~~increased $0.3 million at ~~March~~December 31, 2023 to ~~$43.7~~$53.7 million as compared to ~~$65.5~~$53.4 million at June 30, ~~2022.~~2023. Our working capital was ~~$348.1~~$332.0 million at ~~March~~December 31, 2023, ~~an increase~~a decrease of ~~$19.1~~$27.0 million from ~~$329.0~~$358.9 million at the end of fiscal ~~2022.~~2023. Additionally, our total debt decreased by ~~$32.1~~$19.5 million at ~~March~~December 31, 2023 to ~~$856.6~~$809.2 million as compared to ~~$888.6~~$828.7 million at June 30, ~~2022~~2023 as a result of ~~$31.6~~$18.8 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~~December 31, 2023, substantially all cash was held outside of the United States.

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


		Nine Months Ended March 31,				Change in
		Six Months Ended December 31,
		Six Months Ended December 31,
		Six Months Ended December 31,						Change in
(amounts in thousands)	(amounts in thousands)	2023		2022		Dollars
Cash flows provided by (used in):	Cash flows provided by (used in):
Cash flows provided by (used in):
Cash flows provided by (used in):
Operating activities
Operating activities
Operating activities	Operating activities	$	26,309	$	99,186	$	(72,877)
Investing activities	Investing activities	(13,243)		(284,271)		271,028
Investing activities
Investing activities
Financing activities	Financing activities	(34,792)		172,858		(207,650)
Financing activities
Financing activities
Effect of exchange rate changes on cash
Effect of exchange rate changes on cash
Effect of exchange rate changes on cash	Effect of exchange rate changes on cash	(104)		(5,836)		5,732

Net decrease in cash and cash equivalents		$	(21,830)	$	(18,063)	$	(3,767)
Net increase (decrease) in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash provided by operating activities was ~~$26.3~~$34.7 million for the ~~nine~~six months ended ~~March~~December 31, 2023, ~~a decrease~~an increase of ~~$72.9~~$37.3 million from cash ~~provided by~~used in operating activities of ~~$99.2~~$2.7 million in the prior year period. This ~~decrease~~increase versus the prior period resulted primarily from higher cash generation of $66.2 million from our working capital accounts which was mainly due to our accounts payable optimization initiatives and focused inventory management, partially offset by a reduction in accounts receivable recovery. The increase was also partially offset by a reduction of ~~$60.5~~$28.9 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~~$11.4 million for the ~~nine~~six months ended ~~March~~December 31, 2023, ~~a decrease~~an increase of ~~$271.0~~$5.4 million from ~~$284.3~~$6.0 million in the prior year period primarily due to the ~~acquisition~~receipt of ~~THWR in~~$7.5 million of proceeds from the ~~same period~~divestiture of Westbrae during the ~~prior year.~~six months ended December 31, 2022.

Cash used in financing activities was ~~$34.8~~$24.1 million for the ~~nine~~six months ended ~~March~~December 31, 2023, ~~a decrease~~an increase of ~~$207.7~~$13.2 million compared to ~~$172.9~~$10.9 million ~~of cash provided~~ 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~~debt repayment during the ~~same period in the prior year.~~six months ended December 31, 2023.

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

~~Operating~~Our free cash ~~flows were $4.9~~flow was $22.0 million for the ~~nine~~six months ended ~~March~~December 31, 2023, ~~a decrease~~an increase of ~~$60.4~~$38.7 million from ~~$65.2 million provided by operating~~negative free cash ~~flows~~flow of $16.7 million in the ~~nine~~six months ended ~~March~~December 31, 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~~$37.3 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~~six months ended ~~March~~December 31, 2023, the Company ~~did not repurchase any~~repurchased no shares under the repurchase program. As of ~~March~~December 31, 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.

~~Table of Contents~~

~~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~~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:


(amounts in thousands)	North America			International			Hain Consolidated
Net sales - Three months ended December 31, 2023	$	267,671		$	186,429		$	454,100


Net sales adjusted for divestitures and discontinued brands - Three months ended December 31, 2023	$	267,671		$	186,429		$	454,100

Net sales - Three months ended December 31, 2022	$	282,361		$	171,847		$	454,208
Divestitures and discontinued brands	(1,148)			—			(1,148)
Net sales adjusted for divestitures and discontinued brands - Three months ended December 31, 2022	$	281,213		$	171,847		$	453,060

Net sales (decline) growth	(5.2)		%	8.5		%	—		%
Impact of divestitures and discontinued brands	0.4		%	—		%	0.2		%

Net sales (decline) growth adjusted for divestitures and discontinued brands	(4.8)		%	8.5		%	0.2		%

Net sales - Six months ended December 31, 2023	$	527,725		$	351,404		$	879,129
Divestitures and discontinued brands	8			—			8

Net sales adjusted for divestitures and discontinued brands - Six months ended December 31, 2023	$	527,733		$	351,404		$	879,137

Net sales - Six months ended December 31, 2022	$	570,757		$	322,802		$	893,559
Divestitures and discontinued brands	(2,910)			—			(2,910)
Net sales adjusted for divestitures and discontinued brands - Six months ended December 31, 2022	$	567,847		$	322,802		$	890,649

Net sales (decline) growth	(7.5)		%	8.9		%	(1.6)		%
Impact of divestitures and discontinued brands	0.4		%	—		%	0.3		%

Net sales (decline) growth adjusted for divestitures and discontinued brands	(7.1)		%	8.9		%	(1.3)		%

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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) %

Adjusted EBITDA

The Company defines Adjusted EBITDA as net 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,~~write-downs related to exited categories, 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. 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 December 31,												Three Months Ended December 31,		Six Months Ended December 31,
(amounts in thousands)	(amounts in thousands)	2023		2022		2023		2022		(amounts in thousands)	2023	2022		2023		2022
Net (loss) income	Net (loss) income	$	(115,727)	$	24,531	$	(97,838)	$	74,831

Depreciation and amortization

Depreciation and amortization

Depreciation and amortization	Depreciation and amortization	13,784		12,638		37,909		34,396
Equity in net loss of equity-method investees	Equity in net loss of equity-method investees	528		383		1,226		1,374
Interest expense, net	Interest expense, net	12,924		2,846		30,582		5,677
(Benefit) provision for income taxes	(Benefit) provision for income taxes	(39,587)		7,738		(30,599)		19,425
Stock-based compensation, net	Stock-based compensation, net	3,228		3,846		10,657		12,289
Unrealized currency losses (gains)		202		(594)		651		(2,097)
Litigation and related costs
Unrealized currency (gains) losses

Certain litigation expenses, net(a)
Certain litigation expenses, net(a)
Certain litigation expenses, net(a)	Certain litigation expenses, net(a)	(1,582)		2,005		3,363		5,389

Restructuring activities	Restructuring activities

Restructuring activities

Restructuring activities
Productivity and transformation costs
Productivity and transformation costs
Productivity and transformation costs

Plant closure related costs, net
Plant closure related costs, net
Plant closure related costs, net
Warehouse/manufacturing consolidation and other costs, net
CEO succession	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	Acquisitions, divestitures and other
Transaction and integration costs, net
Transaction and integration costs, net
Transaction and integration costs, net	Transaction and integration costs, net	215		3,419		1,984		12,151
(Gain) loss on sale of assets	(Gain) loss on sale of assets	(134)		55		(3,529)		(9,047)

Impairment charges	Impairment charges
Inventory write-down		—		—		—		(46)
Intangibles and long-lived asset impairment		156,583		—		156,923		303
Impairment charges
Impairment charges
Long-lived asset impairment
Long-lived asset impairment
Long-lived asset impairment
Inventory write-downs related to exited categories

Adjusted EBITDA	Adjusted EBITDA	$	37,260	$	58,669	$	123,106	$	165,249
Adjusted EBITDA
Adjusted EBITDA

(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.

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~~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


	Six Months Ended December 31,
(amounts in thousands)	2023		2022
Net cash provided by (used in) operating activities	$	34,685	$	(2,652)
Purchases of property, plant and equipment	(12,735)		(14,055)
Free cash flow	$	21,950	$	(16,707)

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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.

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~~six months ended ~~March~~December 31, 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~~December 31, 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 ended ~~March~~December 31, 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,~~17, 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"~~“Risk Factors” in the ~~Company's~~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 December 31, 2023, there were no shares repurchased under share repurchase programs approved by the Board of Directors.

During the three months ended December 31, 2023, there were 55,923 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.~~

~~(2) In January 2022,~~plans, at an average price of $11.00 per share. These shares withheld to satisfy tax withholding obligations do not constitute repurchases by 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.Company.

~~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 December 31, 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*						Form of Restricted Share Unit Agreement under The Hain Celestial Group, Inc. 2022 Long Term Incentive and Stock Award Plan – ~~Wendy P. Davidson (2023-2025 LTIP).~~2024-2026 LTIP.

10.2*						Form of 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~~2024-2026 LTIP (Absolute Total Shareholder Return).

















10.3*						Form of 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~~2024-2026 LTIP (Relative Total Shareholder Return).

10.4*						Form of 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).~~Non-Employee Director Awards.

10.5*						~~Separation Agreement, dated as of February 6, 2023, between the Company and David J. Karch.~~











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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Table of Contents

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, 2023~~February 7, 2024	/s/ Wendy P. Davidson
		Wendy P. Davidson, President and Chief Executive Officer (Principal Executive Officer)


Date:	~~May 9, 2023~~February 7, 2024	/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, 2023~~February 7, 2024	/s/ Michael J. Ragusa
		Michael J. Ragusa, Senior Vice President and Chief Accounting Officer (Principal Accounting Officer)

5655


				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	$	—	$	—


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)	—