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What changed in HAIN CELESTIAL GROUP INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of HAIN CELESTIAL GROUP INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+403 added−228 removedSource: 10-K (2024-08-27) vs 10-K (2023-08-24)

Top changes in HAIN CELESTIAL GROUP INC's 2024 10-K

403 paragraphs added · 228 removed · 152 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

55 edited+186 added−3 removed32 unchanged
Biggest changeThe Company’s food and beverage brands include Celestial Seasonings ® , Clarks™, Cully & Sully ® , Earth’s Best ® , Ella’s Kitchen ® , Frank Cooper’s ® , Garden of Eatin’ ® , Garden Veggie ™ , Hartley’s ® , Health Valley ® , Imagine ® , Joya ® , Lima ® , Linda McCartney’s ® (under license), MaraNatha ® , Natumi ® , New Covent Garden Soup Co. ® , ParmCrisps ® , Robertson’s ® , Rose’s ® (under license), Sensible Portions ® , Spectrum ® , Sun-Pat ® , Terra ® , The Greek Gods ® , Thinsters ® , Yorkshire Provender ® and Yves Veggie Cuisine ® .
Biggest changeThe Company's leading brands include Garden Veggie Snacks™, Terra ® chips, Garden of Eatin' ® snacks, Hartley’s ® Jelly, Earth's Best ® and Ella's Kitchen ® baby and kids foods, Celestial Seasonings ® teas, Joya ® and Natumi ® plant-based beverages, Greek Gods ® yogurt, Cully & Sully ® , Yorkshire Provender ® , New Covent Garden ® and Imagine ® soups, Yves ® and Linda McCartney's ® (under license) meat-free, and Avalon Organics ® personal care, among others.
The products sold in the United Kingdom include Ella's Kitchen ® premium organic infant and toddler foods, New Covent Garden Soup Co. ® and Yorkshire Provender ® chilled soups, private label and Farmhouse Fare ™ hot-eating desserts, Linda McCartney’s ® (under license) chilled and frozen plant-based dishes and meals, Hartley’s ® jams, fruit spreads and jellies, Sun-Pat ® nut butters, Clarks™ natural sweeteners and Robertson’s ® , Frank Cooper’s ® and Rose’s ® (under license) marmalades.
The products sold in the United Kingdom include Ella's Kitchen ® premium organic infant and toddler foods, New Covent Garden Soup Co. ® and Yorkshire Provender ® chilled soups, private label and Farmhouse Fare ™ hot-eating desserts, Linda McCartney’s ® (under license) chilled and frozen plant-based dishes and meals, Hartley’s ® jams, fruit spreads and jellies, Sun-Pat ® nut butters, Clarks™ natural sweeteners and Robertson’s ® , Frank Cooper’s ® and Rose’s ® (under license) marmalades and conserves.
The brands sold in Canada include Yves Veggie Cuisine ® refrigerated and frozen meat-alternative snacks and meals, vegetables and lentils, Earth’s Best ® infant formula, MaraNatha ® nut butters, Spectrum ® cooking and culinary oils, Imagine ® aseptic soups, The Greek Gods ® Greek-style yogurt and Robertson’s ® marmalades.
The brands sold in Canada include Yves Veggie Cuisine ® refrigerated and frozen meat-alternative snacks and meals, vegetables and lentils, Earth’s Best ® infant formula, MaraNatha ® nut butters, Spectrum ® cooking and culinary oils, Imagine ® soups, The Greek Gods ® Greek-style yogurt and Robertson’s ® marmalades.
Benefits Our employee benefits vary by region but generally include: • Medical, Dental, and Vision Benefits; • Retirement Savings and Pension Plans; • Commuter Benefits; • Wellness Initiatives; • Tuition Reimbursement; and • Paid Parental Leave including births, adoptions or placements of foster children.
Benefits Our employee benefits vary by region but generally include: • Medical, Dental, and Vision Benefits; • Retirement Savings Plans; • Commuter Benefits; • Wellness Initiatives; • Tuition Reimbursement; and • Paid Parental Leave including births, adoptions or placements of foster children.
Canada Our products are sold throughout Canada. Our customer base consists principally of grocery supermarkets, club stores, mass merchandisers, natural food distributors, drug store chains, personal care distributors, and food service distributors. Our products are sold through our own retail direct sales force. We also utilize third-party brokers who receive commissions and sell to food service and retail customers.
Our customer base consists principally of grocery supermarkets, club stores, mass merchandisers, natural food distributors, drug store chains, personal care distributors, and food service distributors. Our products are sold through our own retail direct sales force. We also utilize third-party brokers who receive commissions and sell to food service and retail customers.
They are the very heart of our Company, and we believe everyone should feel encouraged, respected and welcomed in our workplace. Diversity and inclusion drives success, and we believe that our employees’ diverse backgrounds and experiences are essential to helping us all to continue to thrive internally and deliver innovative products to our customers.
They are the very heart of our Company, and we believe everyone should feel encouraged, respected and welcomed in our workplace. Diversity and inclusion (“D&I”) drives success, and we believe that our employees’ diverse backgrounds and experiences are essential to helping us all to continue to thrive internally and deliver innovative products to our customers.
Our products are principally sold throughout the United Kingdom and Ireland but are also sold in Europe and other parts of the world. Our customer base consists principally of retailers, convenience stores, food service providers, business to business, natural food and ethnic specialty distributors, club stores and wholesalers.
Our products are principally sold throughout the United Kingdom and Ireland but are also sold in Europe and other parts of the world. Our customer base consists principally of retailers, convenience stores, food service providers, business to business, natural food and ethnic specialty distributors, club stores, e-commerce retailers and wholesalers.
In the United States, the federal agencies governing the manufacture, marketing and distribution of our products include, among others, the Federal Trade Commission (“FTC”), the United States Food & Drug Administration (“FDA”), the United States Department of Agriculture (“USDA”), the United States Environmental Protection Agency (“EPA”) and the Occupational Safety and Health Administration (“OSHA”).
In the U.S., the federal agencies governing the manufacture, marketing and distribution of our products include, among others, the Federal Trade Commission (“FTC”), the United States Food & Drug Administration (“FDA”), the United States Department of Agriculture (“USDA”), the United States Environmental Protection Agency (“EPA”) and the Occupational Safety and Health Administration (“OSHA”).
Our International reportable segment operates the following manufacturing facilities: • Histon, England, which produces our ambient grocery products including Hartley’s ® , Frank Cooper’s ® , Robertson’s ® and Clarks™; • Grimsby, England, which produces our New Covent Garden Soup Co. ® and Yorkshire Provender ® chilled soups; • Clitheroe, England, which produces our private label and Farmhouse Fare TM hot-eating desserts; • Fakenham, England, which produces Linda McCartney’s ® (under license) meat-free frozen and chilled dishes and meals; • Troisdorf, Germany, which produces Natumi ® , Lima ® , Joya ® and other plant-based beverages and private label products; • Oberwart, Austria, which produces our Lima ® and Joya ® plant-based foods and beverages, creamers, cooking creams and private label products; and • Schwerin, Germany, which also produces our Lima ® and Joya ® plant-based foods and beverages and private label products.
Our International reportable segment operates the following manufacturing facilities: • Histon, England, which produces our ambient grocery products including Hartley’s ® , Frank Cooper’s ® , Robertson’s ® and Clarks™; • Grimsby, England, which produces our New Covent Garden Soup Co. ® and Yorkshire Provender ® chilled soups; • Clitheroe, England, which produces our private label and Farmhouse Fare TM hot-eating desserts; • Fakenham, England, which produces Linda McCartney’s ® (under license) meat-free frozen and chilled dishes and meals; • Troisdorf, Germany, which produces Natumi ® , Lima ® , Joya ® and other plant-based beverages and private label products; • Oberwart, Austria, which produces our Lima ® and Joya ® plant-based foods and beverages, creamers, cooking creams and private label products; and 8 Table of Contents • Schwerin, Germany, which also produces our Lima ® and Joya ® plant-based foods and beverages and private label products.
Our North America reportable segment operates the following manufacturing facilities: • Boulder, Colorado, which produces Celestial Seasonings ® teas; • Mountville, Pennsylvania, which produces Garden Veggie ™ , Sensible Portions ® and Terra ® snack products; • Bell, California, which produces Alba Botanica ® , Avalon Organics ® , and JASON ® personal care products; • Lancaster, Pennsylvania, which produces snack products; • York, Pennsylvania, which produces ParmCrisps ® ; • Vancouver, British Columbia, which produces Yves Veggie Cuisine ® plant-based snacks and meals; and • Mississauga, Ontario, which produces our Live Clean ® and other personal care products.
Our North America reportable segment operates the following manufacturing facilities: • Boulder, Colorado, which produces Celestial Seasonings ® teas; • Mountville, Pennsylvania, which produces Garden Veggie ™ , Sensible Portions ® and Terra ® snack products; • Lancaster, Pennsylvania, which produces snack products; • York, Pennsylvania, which produces ParmCrisps ® ; • Vancouver, British Columbia, which produces Yves Veggie Cuisine ® plant-based snacks and meals; and • Mississauga, Ontario, which produces Live Clean ® , Alba Botanica ® , Avalon Organics ® , and JASON ® personal care products.
Company Website and Available Information The following information can be found, free of charge, in the “Investor Relations” section of our corporate website at ir.hain.com : • our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC; • our policies related to corporate governance, including our Code of Business Conduct and Ethics (“Code of Ethics”) applying to our directors, officers and employees (including our principal executive officer and principal financial and accounting officers) that we have adopted to meet the requirements set forth in the rules and regulations of the SEC and The Nasdaq Stock Market LLC; and • the charters of the Audit, Compensation, Corporate Governance and Nominating, and Strategy Committees of our Board of Directors.
Company Website and Available Information The following information can be found, free of charge, in the “Investor Relations” section of our corporate website at ir.hain.com : • our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC; • our policies related to corporate governance, including our Code of Conduct applying to our directors, officers and employees (including our principal executive officer and principal financial and accounting officers) that we have adopted to meet the requirements set forth in the rules and regulations of the SEC and The Nasdaq Stock Market LLC; and • the charters of the Audit, Compensation and Talent Management, Corporate Governance and Nominating and Strategy Committees of our Board of Directors.
We believe that our direct salespeople com bined with brokers and distributors provide an effective means of reaching a broad and diverse customer base. Brokers act as agents for us within designated territories and receive commissions. A portion of our direct sales force is organized into dedicated teams to serve our significant customers.
We believe that our direct salespeople combined with brokers and distributors provide an effective means of reaching a broad and diverse customer base. Brokers act as agents for us within designated territories and receive commissions. A portion of our direct sales force is organized into dedicated teams to serve our significant customers.
See “Item 2: Properties” of this Form 10-K for more information on the manufacturing facilities that we operate. 8 Table of Contents Contract Manufacturers In addition to the products manufactured in our own facilities, independent third-party contract manufacturers, who are referred to in our industry as co-manufacturers or co-packers, manufacture many of our products.
See “Item 2: Properties” of this Form 10-K for more information on the manufacturing facilities that we operate. Contract Manufacturers In addition to the products manufactured in our own facilities, independent third-party contract manufacturers, who are referred to in our industry as co-manufacturers or co-packers, manufacture many of our products.
Our products are sold in grocery stores and organic food stores throughout Europe, the Middle East and India. Our products are sold using our own direct sales force and local distributors.
Our products are sold in grocery stores and organic food stores throughout Europe, the Middle East and Africa. Our products are sold using our own direct sales force and local distributors.
We have additional regional programs and policies in place to encourage open communications with management and Human Resources about employees’ ideas, concerns and how they are doing. Products Our brand portfolio focuses on growing global brands in categories where we believe we have the most potential.
We have additional regional programs and policies in place to 5 Table of Contents encourage open communications with management and Human Resources about employees’ ideas, concerns and how they are doing. Products Our brand portfolio focuses on growing global brands in categories where we believe we have the most potential.
Our purchasers and quality team visit major suppliers around the world to procure competitively priced, quality ingredients that meet our specifications. We maintain long-term relationships with many of our suppliers. Purchase arrangements with ingredient suppliers are generally made annually. Purchases are made through purchase orders or contracts, and price, delivery terms and product specifications vary.
Our purchasers and quality team visit major suppliers around the world to procure competitively priced, quality ingredients that meet our specifications. We maintain long-term relationships with many of our suppliers. Purchases are made through purchase orders or contracts, and price, delivery terms and product specifications vary.
We also sell our Hartley’s ® jams, fruit spreads and jellies, Terra ® varieties of root vegetable and potato chips, Celestial Seasonings ® teas, Linda McCartney’s ® (under license) chilled and frozen plant-based dishes and meals, Cully & Sully ® chilled soups and ready meals, and private label products in Europe.
We also sell our Hartley’s ® jams, fruit spreads and jellies, Terra ® varieties of root vegetable and potato chips, Celestial Seasonings ® teas, Linda McCartney’s ® (under license) frozen plant-based dishes and meals, Cully & Sully ® chilled soups and ready meals, Happy Rice ® drink and private label products in Western Europe.
Our customer base consists principally of specialty and natural food distributors, supermarkets and natural food stores, mass-market, club stores, e-commerce retailers, drug and convenience stores, and food service channels. Our products are sold through a combination of direct salespeople, brokers and distributors.
Our customer base consists principally of specialty and natural food distributors, supermarkets and natural food stores, mass-market, club stores, e-commerce retailers, and away from home channels, including drug and convenience stores and food service. Our products are sold through a combination of direct salespeople, brokers and distributors.
In the United States, each of our own food manufacturing facilities has a Food Safety Plan (“FSP”), which focuses on preventing food safety risks and is compliant with the requirements set forth under the Food Safety Modernization Act (“FSMA”).
In the U.S., each of our own food manufacturing facilities has a Food Safety Plan (“FSP”), which focuses on preventing food safety risks and is compliant with the requirements set forth under the Food Safety Modernization Act (“FSMA”).
We generally register our trademarks and brand names in the United States, Canada, the European Union, and the United Kingdom and/or other foreign countries depending on the area of distribution of the applicable products. We intend to keep these filings current and seek protection for new trademarks to the extent consistent with business needs.
We generally register our trademarks and brand names in the U.S., Canada, the European Union, and the U.K. and/or other foreign countries depending on the area of distribution of the applicable products. We intend to keep these filings current and seek protection for new trademarks to the extent consistent with business needs.
Our products compete with both large conventional packaged goods companies and natural and organic packaged foods companies. Many of these competitors enjoy significantly greater resources. Large conventional packaged foods competitors include Campbell Soup Company, Conagra Brands, Inc., Danone S.A., General Mills, Inc., The Hershey Company, The J.M.
Our products compete with both large conventional packaged goods companies and natural and organic packaged foods companies. Many of these competitors enjoy significantly greater resources. Large conventional packaged foods competitors include Campbell Soup Company, Conagra Brands, Inc., Danone S.A., General Mills, Inc., The Hershey Company, The J.M. Smucker Company, Kellanova, Mondelez International, Inc., Nestle S.A. and PepsiCo, Inc.
We utilize a third-party merchandising team for retail execution. As in the United States, a portion of the products marketed by us are sold through independent distributors.
We utilize a third-party merchandising team for retail execution. As in the U.S., a portion of the products marketed by us are sold through independent distributors.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 and Note 19, Segment Information , in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K for additional details. North America Segment: United States Our products are sol d throughout the United States.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 and Note 20, Segment Information , in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K for additional details. North America Segment: United States Our products are sold throughout the U.S.
During fiscal 2023, 2022 and 2021, approximately 42%, 49% and 39%, respec tively, of our sales were derived from products manufactured by co-packers. We require that our co-packers comply with all applicable regulations and our quality and food safety program requirements, and compliance is verified through auditing and other activities.
During fiscal 2024, 2023 and 2022, approximately 35%, 42% and 49%, respectively, of our sales were derived from products manufactured by co-packers. We require that our co-packers comply with all applicable regulations and our quality and food safety program requirements, and compliance is verified through auditing and other activities.
Production Manufacturing During fiscal 2023, 2022 and 2021, approximately 58% , 51% and 61%, respectively, of our revenue was derived from products manufactured at our own facilities.
Production Manufacturing During fiscal 2024, 2023 and 2022, approximately 65%, 58% and 51%, respectively, of our revenue was derived from products manufactured at our own facilities.
We have focused our Impact strategy around expanding our commitment to environmentally sound business practices, creating and selling better-for-you products, social and commUpunity impact initiatives and sustainable manufacturing processes. Our Impact strategy also consists of our environmental, social, and governance (“ESG”) goals along with a commitment to considering long-term social and environmental impacts.
Our Impact strategy focuses on expanding our commitment to environmentally sound business practices, creating and selling better-for-you products, social and community impact initiatives and sustainable manufacturing processes. Our Impact strategy also consists of our environmental, social, and governance (“ESG”) goals along with a commitment to considering long-term social and environmental impacts.
We are continuing to work to build our D&I efforts into recruitment, retention and internal mobility. As of June 30, 2023, our global workforce was 59% male and 41% female.
We are continuing to work to build our D&I efforts into recruitment, retention and internal mobility. As of June 30, 2024, our global workforce was 60% male and 40% female.
Government Regulation We are subject to extensive regulations in the United States by federal, state and local government authorities.
Government Regulation We are subject to extensive regulations in the U.S. by federal, state and local government authorities.
More details about our Impact strategy and goals, including our most recent ESG Report, are available at hain.com/company/impact. Our ESG Reports and the other information available at hain.com/company/impact are not, and shall not be deemed to be, a part of this Form 10-K or incorporated into any of our other filings made with the Securities and Exchange Commission (the “SEC”).
Our Impact Reports and the other information available at hain.com/company/impact are not, and shall not be deemed to be, a part of this Form 10-K or incorporated into any of our other filings made with the Securities and Exchange Commission (the “SEC”).
In the United States, on an employee self-reported basis, the racial/ethnic composition of our workforce was approximately 40% Hispanic or Latino, 42% White, 10% Black or African American, 6% Asian and 2% other. We make additional workforce demographic data available at hain.com/impact .
In the United States (“U.S.”), on an employee self-reported basis, the racial/ethnic composition of our workforce was approximately 44% White, 38% Hispanic or Latino, 11% Black or African American, 5% Asian and 2% other. We make additional workforce demographic data available at hain.com/impact .
We promote fairness by practicing equal opportunity in all decisions about hiring, compensation, training, promotions and every other aspect of employment. 4 Table of Contents We maintain a Diversity & Inclusion (“D&I”) Council in North America to create and foster a workplace that reflects and contributes to the diverse, global communities in which we do business.
We promote fairness by practicing equal opportunity in all decisions about hiring, compensation, training, promotions and every other aspect of employment. We maintain a global D&I Council to create and foster a workplace that reflects and contributes to the diverse, global communities in which we do business.
Our Natumi ® brand includes plant-based beverages, including rice, soy, oat and spelt. Our Joya ® brand includes soy, oat, rice and nut-based drinks as well as plant-based yogurts, desserts, creamers and tofu.
Our Joya ® brand includes soy, oat, rice and nut-based drinks as well as plant-based yogurts, desserts and creamers.
Human Capital Resources As of June 30, 2023, we had approximately 2,837 employees, with approximately 46% located in North America and approximately 54% located outside of North America. Approximately 59% of our employees in North America and approximately 60% of our employees outside of North America were based in our production facilities.
Human Capital Resources As of June 30, 2024, we had approximately 2,786 employees, with approximately 46% located in North America and approximately 54% located outside of North America. Approximately 57% of our employees in North America and approximately 61% of our employees outside of North America were based in our production facilities.
We continuously evaluate our existing products for quality, taste, nutritional value and cost and make improvements where possible. Conversely, we discontinue products or stock keeping units (“SKUs”) when sales of those items do not warrant further production. Products under different brands for our reportable segments are noted in the segments section.
We continuously evaluate our existing products for quality, taste, nutritional value and cost and make improvements where possible. We discontinue products or stock keeping units when sales of those items do not warrant further production. The segments section details the various products that are categorized under distinct brands corresponding to our reportable segments.
The brands sold in the United States include: • Garden Veggie ™ and Sensible Portions ® snack products including Garden Veggie Straws ® , Garden Veggie Chips and Apple Straws ® , Terra ® varieties of root vegetable chips, potato chips, and other exotic vegetable chips, Garden of Eatin’ ® tortilla chips, and ParmCrisps ® . • Tea products under the Celestial Seasonings ® brand and include more than 100 varieties of herbal, green, black, wellness, rooibos and chai teas, with well-known names and products such as Sleepytime ® , Lemon Zinger ® , Red Zinger ® , Cinnamon Apple Spice, Bengal Spice ® , Country Peach Passion ® and Tea Well ® . • Baby food products include infant and toddler formula, infant cereals, jarred baby food, baby food pouches, snacks and frozen toddler and kids’ foods under the Earth’s Best ® and Earth’s Best Sesame Street (under license) brands. • Yogurt products include The Greek Gods ® Greek-style yogurt products. • Personal care products include hand, skin, hair and oral care products, sun care products and deodorants under the Alba Botanica ® , Avalon Organics ® , JASON ® and Queen Helene ® brands. • Other products include Spectrum ® culinary oils, vinegars and condiments, Spectrum Essentials ® nutritional oils and supplements, MaraNatha ® nut butters, Imagine ® broths, soups and gravies, Hain Pure Foods ® condiments, Health Valley ® cereal bars and soups, and Hollywood ® oils.
The brands sold in the U.S. include: • Garden Veggie ™ snack products including Garden Veggie Straws ® , Garden Veggie Chips, Flavor Burst ™ and Apple Straws ® , Terra ® varieties of root vegetable chips, potato chips, and other exotic vegetable chips, Garden of Eatin’ ® tortilla chips and ParmCrisps ® . • Tea products under the Celestial Seasonings ® brand and include varieties of herbal, green, black, wellness, rooibos and chai teas, with well-known names and products such as Sleepytime ® , Lemon Zinger ® , Red Zinger ® , Cinnamon Apple Spice, Bengal Spice ® , Country Peach Passion ® and Tea Well ® . • Baby and kid food products include infant and toddler formula, infant cereals, baby food pouches, snacks and frozen toddler and kids’ foods under the Earth’s Best ® and Earth’s Best ® Sesame Street (under license) brands. • Yogurt products include The Greek Gods ® Greek-style yogurt products. • Personal care products include hand, skin, hair and sun care products under the Alba Botanica ® , Avalon Organics ® and JASON ® brands. • Other products include Spectrum ® culinary oils, vinegars and condiments, Spectrum Essentials ® nutritional oils and supplements, MaraNatha ® nut butters, Imagine ® broths and soups. 6 Table of Contents Canada Our products are sold throughout Canada.
Given limited retailer shelf space and merchandising events, competitors actively support their respective brands with marketing, advertising and promotional spending. In addition, most retailers market similar items under their own private label, which compete for the same shelf space.
In addition to these competitors, in each of our categories we compete with many regional and small, local niche brands. Given limited retailer shelf space and merchandising events, competitors actively support their respective brands with marketing, advertising and promotional spending. In addition, most retailers market similar items under their own private label, which compete for the same shelf space.
In recent years, net sales and diluted earnings per share in the first fiscal quarter have typically been the lowest of our four quarters. 5 Table of Contents Segments Our organization structure consists of two geographic based reportable segments: North America and International.
Historically, net sales and diluted earnings per share in the first fiscal quarter have typically been the lowest of our four quarters. Segments The Company’s organization structure consists of two geographic based reportable segments: North America and International, which are also the Company’s operating segments.
For example, our Earth’s Best ® brand has an agreement with PBS Kids and Sesame Workshop in the United States, leveraging popular characters for on and off packaging communications. We also leverage various influencers to help increase brand reach and relevance.
We also utilize marketing arrangements with third parties to help create awareness and advocacy. For example, our Earth’s Best ® brand has an agreement with PBS Kids and Sesame Workshop in North America, leveraging popular characters for on and off packaging communications. We also leverage various influencers to help increase brand reach and relevance.
Smucker Company, Kellogg Company, Mondelez International, Inc., Nestle S.A., PepsiCo, Inc. and Unilever PLC. Large conventional personal care products companies with whom we compete include, but are not limited to, The Clorox Company, Colgate-Palmolive Company, Johnson & Johnson, The Procter & Gamble Company, S. C. Johnson & Son, Inc. and Unilever PLC.
Smucker Company, Kellanova, Mondelez International, Inc., Nestle S.A. and PepsiCo, Inc., and conventional personal care products companies, including but not limited to The Clorox Company, Colgate-Palmolive Company, Johnson & Johnson, The Procter & Gamble Company and S. C.
In addition, you may automatically receive email alerts and other information about the Company when you enroll your email address by visiting “E-mail Alerts” under the "IR Resources" section of our investor relations website. Information on the Company’s website is not incorporated by reference herein and is not a part of this Form 10-K. 11 Table of Contents
In addition, you may automatically receive email alerts and other information about the Company when you enroll your email address by visiting “E-mail Alerts” under the "IR Resources" section of our investor relations website.
We also work with other non-governmental organizations such as NSF International, which developed the NSF/ANSI 305 Standard for Personal Care Products Containing Organic Ingredients and provides third-party certification through QAI for certain of our personal care products.
Many of our products are certified kosher under the supervision of accredited agencies including The Union of Orthodox Jewish Congregations and “KOF-K” Kosher Supervision. 10 Table of Contents We also work with other non-governmental organizations such as NSF International, which developed the NSF/ANSI 305 Standard for Personal Care Products Containing Organic Ingredients and provides third-party certification through QAI for certain of our personal care products.
Customers Walmart Inc. and its affiliates together accounted for approximately 16%, 15% and 11% of our consolidated sales for the fiscal years ended June 30, 2023, 2022 and 2021, respectively, which were primarily related to the United States, Canada and United Kingdom.
Customers Walmart Inc. and its affiliates together accounted for approximately 18%, 16% and 15% of our consolidated sales for the fiscal years ended June 30, 2023, 2022 and 2021, respectively, which was related to both of our reportable segments, North America and International.
No other customer accounted for at least 10% of our net sales in any of the past three fiscal years. Foreign Operations We sell our products to customers worldwide. Sales outside of the United States represented approximately 43%, 45% and 52% of our consolidated net sales in fiscal 2023, 2022 and 2021, respectively.
No other customer accounted for at least 10% of our net sales in any of the past three fiscal years. Foreign Operations We sell our products to customers worldwide.
Item 1. Business 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. The Company is a leading manufacturer, marketer and seller of better-for-you brands that inspire healthier living.
Item 1. Bu siness Overview The Hain Celestial Group, Inc., a Delaware corporation (collectively with its subsidiaries, the “Company,” “Hain Celestial,” “we,” “us” or “our”) was founded in 1993. Hain Celestial is a leading global health and wellness company whose purpose is to inspire healthier living for people, communities and the planet through better-for-you brands.
Europe Our products sold by the Europe reporting unit include, among others, products sold under the Joya ® , Lima ® and Natumi ® brands. The Lima ® brand includes a wide range of organic products such as soy sauce, plant-based beverages and grain cakes, as well as grains, pasta, cereals, miso, snacks, sweeteners, spreads, soups and condiments.
The Lima ® brand includes a wide range of organic products such as soy sauce, plant-based beverages, tea and coffee alternatives and grain cakes, as well as grains, pasta, cereals, miso, snacks, spreads, soups and condiments. Our Natumi ® brand includes plant-based beverages, including rice, soy, oat and spelt.
Agricultural commodities and ingredients are subject to price volatility which can be caused by a variety of factors. We attempt to mitigate the input price volatility by negotiating and entering into purchase arrangements with our suppliers and by adjusting the sale price of our products. Competition We operate in a highly competitive environment.
Agricultural commodities and ingredients are subject to price volatility which can be caused by a variety of factors. We attempt to mitigate the input price volatility with a combination of price increases to our customers, purchasing strategies, cost savings initiatives and operating efficiencies. Competition We operate in a highly competitive environment.
Trial and conversion tactics include, but are not limited to, product search on Google and e-commerce sites, digital coupons, product sampling, direct mail and e-consumer relationship programs.
Trial and conversion tactics include, but are not limited to, product search on Google and e-commerce sites, digital coupons, product sampling, direct mail and e-consumer relationship programs. Additionally, brand specific websites and social media pages are used to engage consumers with lifestyle, product and usage information related to specific brands.
Marketing We aim to meet the consumer at multiple points in their journey, across the digital and omnichannel ecosystem, communicating both in-store and online. We use a combination of trade and consumer advertising and promotion. Trade advertising and promotion includes placement fees, cooperative advertising, feature advertising in distribution catalogs and in-store merchandising in prominent and secondary locations.
We use a combination of trade and consumer advertising and promotion. Trade advertising and promotion includes placement fees, cooperative advertising, feature advertising in distribution catalogs and in-store merchandising in prominent and secondary locations.
Our personal care products include skin, hair and oral care products, sun care products and deodorants under the Alba Botanica ® , Avalon Organics ® , JASON ® , and Live Clean ® brands. 6 Table of Contents International Segment: United Kingdom In the United Kingdom, our products include soups, plant-based and meat-free dishes and meals, as well as ambient products such as jams, fruit spreads, jellies, honey, marmalades, nut butters, sweeteners, syrups and dessert sauces.
International Segment: United Kingdom In the United Kingdom, our products include baby and toddler food, soups, plant-based and meat-free dishes and meals, as well as ambient products such as jams, fruit spreads, jellies, honey, marmalades, nut butters, syrups and dessert sauces.
This structure is in line with how our Chief Operating Decision Maker (“CODM”) assesses our performance and allocates resources.
This structure is in line with how our 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.
Substantially all of our employees are full-time, permanent employees. Our employees are critical to our success. The following programs, initiatives and principles encompass some of the human capital objectives and measures that we focus on in managing our business and in seeking to attract and retain a talented workforce. Diversity and Inclusion People have always been our greatest asset.
The following programs, initiatives and principles encompass some of the human capital objectives and measures that we focus on in managing our business and in seeking to attract and retain a talented workforce. 4 Table of Contents Our Purpose, Mission and Values We are guided by our Purpose, Mission and Values.
Other food brands include Celestial Seasonings ® teas, Terra ® chips and Garden Veggie ™ and Sensible Portions ® snack products.
Other food and beverage brands include Celestial Seasonings ® teas, Terra ® chips and Garden Veggie ™ and Sensible Portions ® snack products. Our personal care products include skin, hair and oral care products, sun care products and deodorants under the Alba Botanica ® , Avalon Organics ® , JASON ® and Live Clean ® brands.
In the United States, our organic products are certified in accordance with the USDA’s National Organic Program through Quality Assurance International (“QAI”), a third-party certifying agency.
In the U.S., our organic products are certified in accordance with the USDA’s National Organic Program through Quality Assurance International (“QAI”), a third-party certifying agency. For products marketed as organic outside of the U.S., we use accredited certifying agencies to ensure compliance with country-specific government regulations for selling organic products or reciprocity, where available.
The Company’s personal care brands include Alba Botanica ® , Avalon Organics ® , JASON ® , Live Clean ® and Queen Helene ® . Impact We are a global health and wellness company whose purpose is to inspire healthier living for people, communities, and the planet through better-for-you brands.
For further information, see Management's Discussion and Analysis of Financial Condition and Results of Operations included in Item 7 of this Form 10-K. Impact We are a global health and wellness company whose purpose is to inspire healthier living for people, communities, and the planet through better-for-you brands.
Certain of these large conventional packaged foods and personal care companies compete with us by selling both conventional products and natural and/or organic products. In addition to these competitors, in each of our categories we compete with many regional and small, local niche brands.
Large conventional personal care products companies with whom we compete include, but are not limited to, The Clorox Company, Colgate-Palmolive Company, Johnson & Johnson, The Procter & Gamble Company and S. C. Johnson & Son, Inc. Certain of these large conventional packaged foods and personal care companies compete with us by selling both conventional products and natural and/or organic products.
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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.
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For more than 30 years, Hain Celestial has intentionally focused on delivering nutrition and well-being that positively impacts today and tomorrow. Headquartered in Hoboken, NJ, Hain Celestial’s products across snacks, baby & kids, beverages, meal preparation and personal care, are marketed and sold in over 70 countries around the world.
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Additionally, brand specific websites and social media pages are used to engage consumers with lifestyle, product and usage information related to specific brands. 7 Table of Contents We also utilize marketing arrangements with third parties to help create awareness and advocacy.
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Hain Reimagined Program During the first quarter of fiscal year 2024, we initiated a multi-year growth, transformation and restructuring program (the “Hain Reimagined Program”) intended to drive shareholder returns. The savings initiatives impact our reportable segments and Corporate and Other.
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For products marketed as organic outside of the United States, we use accredited certifying agencies to ensure compliance with country-specific government regulations for selling organic products or reciprocity, where available. 10 Table of Contents Many of our products are certified kosher under the supervision of accredited agencies including The Union of Orthodox Jewish Congregations and “KOF-K” Kosher Supervision.
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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. The Hain Reimagined Program is grounded on four strategic pillars: Focus, Grow, Build and Fuel.
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Implementation of the Hain Reimagined Program is expected to be completed by the end of the 2027 fiscal year. Cumulative pretax charges associated with the Hain Reimagined Program are expected to be $115 million - $125 million inclusive of potential inventory write-downs of approximately $25 million related to brand/category exits.
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The balance of cumulative pretax restructuring charges is expected to be $90 million - $100 million comprised of contract termination costs, asset write-downs, employee-related costs and other transformation-related expenses. Annualized pretax savings are expected to be $130 million - $150 million.
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More details about our Impact strategy and goals, including our most recent Impact Report, are available at hain.com/company/impact .
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Substantially all of our employees are full-time, permanent employees. Our Board of Directors and its committees provide oversight of our culture and strategy related to people management, including the Company’s diversity, equity and inclusion program, talent management, employee demographics, employee engagement, workplace health and safety, and communication programs. Our employees are critical to our success.
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Purpose: To inspire healthier living for people, communities and the planet through better-for-you brands Mission: To build purpose-driven brands that make healthier living more attainable by empowering our people, engaging our partners, and living our values Values: (1) Be curious, (2) Foster inclusion, (3) Own it and (4) Win together Diversity and Inclusion People have always been our greatest asset.
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Our D&I Council supports employee resource groups (“ERGs”) that help to foster a culture of inclusion in all regions, while enabling employees to connect with one another. These ERGs also provide feedback on how we can do more to increase female and diverse representation in leadership.
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Western Europe Our products sold by the Western Europe reporting unit include, among others, products sold under the Joya ® , Lima ® and Natumi ® brands.
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Sales outside of the U.S. represented approximately 46%, 43% and 45% of our consolidated net sales in fiscal 2024, 2023 and 2022, respectively. 7 Table of Contents Marketing We aim to meet the consumer at multiple points in their journey, across the digital and omni channel ecosystem, communicating both in-store and online.
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Information on the Company’s website is not incorporated by reference herein and is not a part of this Form 10-K. 11 Table of Contents Item 1 A. Risk Factors Our business, operations and financial condition are subject to various risks and uncertainties.
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While we believe we have identified and discussed below the key risk factors affecting our business, there may be additional risks and uncertainties not presently known to us or that we currently consider immaterial. If any of the following risks and uncertainties develop into actual events, our business, financial condition or results of operations could be materially adversely affected.
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In such case, the trading price of our common stock could decline, and you may lose all or part of your investment. You should not interpret the disclosure of any risk factor to imply that the risk has not already materialized.
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These risk factors should be read in conjunction with the other information in this Annual Report on Form 10-K and in the other documents that we file from time to time with the SEC. Risks Related to Our Business, Operations and Industry Our markets are highly competitive. We operate in highly competitive geographic and product markets.
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Numerous brands and products compete for limited retailer shelf space, where competition is based on product quality, brand recognition, brand loyalty, price, product innovation and variety, packaging, convenience, promotional activity, availability and taste among other things. Retailers also market competitive products under their own private labels, which are generally sold at lower prices and compete with some of our products.
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Some of our markets are dominated by multinational corporations with greater resources and more substantial operations than us. We may not be able to successfully compete for sales to distributors or retailers that purchase from larger competitors that have greater financial, managerial, sales, technical and operational resources.
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Conventional food companies, including but not limited to Campbell Soup Company, Conagra Brands, Inc., Danone S. A., General Mills, Inc., The Hershey Company, The J.M.
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Johnson & Son, Inc., may be able to use their resources and scale to respond to competitive pressures and changes in consumer preferences by introducing new products or reformulating their existing products, reducing prices or increasing promotional activities.
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We also compete with other organic and natural packaged food brands and companies, which may be more innovative and able to bring new products to market faster and may be better able to quickly exploit and serve niche markets. As a result of this competition, retailers may take actions that negatively affect us.
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Consequently, we may need to increase our marketing, advertising and promotional spending to protect our existing market share, which may result in an adverse impact on our profitability. If we do not manage our supply chain effectively or if there are disruptions in our supply chain, our business and results of operations may be adversely affected.
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The success of our business depends, in part, on maintaining a strong sourcing and manufacturing platform and efficient distribution channels.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeProperties Our principal facilities, which are leased except where otherwise indicated, are as follows: Primary Use Location Approximate Square Feet Expiration of Lease North America: Temporary headquarters office and Manufacturing (Tea) Boulder, CO 158,000 Owned Distribution - All brands Allentown, PA 497,000 2032 Distribution center (Grocery, snacks, and personal care products) Ontario, CA 373,000 2023 Manufacturing and distribution center (Snack products) Mountville, PA 161,000 2040 Distribution (Dry goods) Mississauga, ON, Canada 136,000 2029 Manufacturing and distribution (Personal care) Bell, CA 125,000 2038 Manufacturing and distribution (Snack products) Lancaster, PA 119,000 2031 Distribution (Personal care) Mississauga, ON, Canada 81,000 2029 Manufacturing (Plant-based foods) Vancouver, BC, Canada 76,000 Owned Manufacturing and distribution (Snack products) York, PA 71,000 2030 Manufacturing and offices (Personal care) Mississauga, ON, Canada 61,000 2025 Distribution (Tea) Boulder, CO 57,000 2031 International: Manufacturing and offices (Ambient grocery products) Histon, England 303,000 Owned Manufacturing, distribution and offices (Plant-based beverages) Troisdorf, Germany 131,000 2037 Manufacturing Oberwart, Austria 117,000 At will Manufacturing (Plant-based frozen and chilled products) Fakenham, England 101,000 Owned Distribution Gent, Belgium 64,000 At will Distribution Niederziers, Germany 54,000 At will Manufacturing (Chilled soups) Grimsby, England 54,000 2029 Distribution (Soups, hot desserts, chilled products, grocery) Peterborough, England 43,000 2024 Manufacturing (Hot-eating desserts) Clitheroe, England 42,000 2031 Distribution Loipersdorf, Austria 41,000 At will Manufacturing and distribution (Plant-based foods and beverages) Schwerin, Germany 36,000 Owned We also lease space for other smaller offices and facilities in the United States, United Kingdom, Canada, Europe and other parts of the world.
Biggest changePr operties Our principal facilities, which are leased except where otherwise indicated, are as follows: Primary Use Location Approximate Square Feet Expiration of Lease North America: Global Headquarters Hoboken, NJ 39,990 2034 Distribution - All brands Allentown, PA 497,000 2032 Manufacturing and distribution center (Snack products) Mountville, PA 161,000 2040 Manufacturing and offices (Tea) Boulder, CO 158,000 Owned Distribution (Dry goods) Mississauga, ON, Canada 136,000 2029 Manufacturing and distribution (Snack products) Lancaster, PA 119,000 2031 Distribution (Personal care) Mississauga, ON, Canada 81,000 2029 Manufacturing (Plant-based foods) Vancouver, BC, Canada 76,000 Owned Manufacturing and distribution (Snack products) York, PA 71,000 2030 Manufacturing and offices (Personal care) Mississauga, ON, Canada 61,000 2025 Distribution (Tea) Boulder, CO 57,000 2031 International: Manufacturing and offices (Ambient grocery products) Histon, England 303,000 Owned Manufacturing, distribution and offices (Plant-based beverages) Troisdorf, Germany 131,000 2037 Manufacturing (Plant-based foods and beverages) Oberwart, Austria 117,000 At will Manufacturing (Plant-based frozen and chilled products) Fakenham, England 101,000 Owned Distribution Gent, Belgium 64,000 At will Distribution Niederziers, Germany 54,000 At will Manufacturing (Chilled soups) Grimsby, England 54,000 2029 Distribution (Soups, hot-eating desserts, chilled products, grocery) Peterborough, England 43,000 2026 Manufacturing (Hot-eating desserts) Clitheroe, England 42,000 2031 Distribution Loipersdorf, Austria 41,000 At will Manufacturing and distribution (Plant-based foods and beverages) Schwerin, Germany 36,000 Owned We also lease space for other smaller offices and facilities in the United States, United Kingdom, Canada, Western Europe and other parts of the world.
For further information regarding our lease obligations, see Not e 7, Leases , in the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K. For further information regarding the use of our properties by segments, see Item 1, “Business - Production” of this Form 10-K. 22 Table of Contents
For further information regarding the use of our properties by segments, see Item 1, “Business - Production” of this Form 10-K.
In addition to the foregoing distribution facilities operated by us, we also utilize bonded public warehouses from which deliveries are made to customers. Subsequent to June 30, 2023, the Company entered into an operating lease for its new global headquarters, which has not yet commenced.
In addition to the foregoing distribution facilities operated by us, we also utilize bonded public warehouses from which deliveries are made to customers. For further information regarding our lease obligations, see Note 7, Leases , in the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings The information called for by this item is incorporated herein by reference to Note 17, Commitments and Contingencies , in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K.
Biggest changeItem 3. Le gal Proceedings The information called for by this item is incorporated herein by reference to Note 17, Commitments and Contingencies , in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K. Item 4. Mine Safety Disclosures Not applicable. 24 Table of Contents PA RT II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAs of June 30, 2023, the Company had $174 million of remaining authorization under the share repurchase program. 24 Table of Contents Stock Performance Graph The following graph compares the cumulative total shareholder return on our common stock during the period from June 30, 2018 through June 30, 2023 to the cumulative total shareholder return during such period on (1) the S&P 500 Index, (2) the S&P SmallCap 600 Index, (3) the S&P 500 Packaged Foods & Meats Index and (4) the S&P Food & Beverage Select Industry Index (in which we are included).
Biggest changeAs of June 30, 2024, the Company had $173.5 million of remaining authorization under the share repurchase program. 25 Table of Contents Stock Performance Graph The following graph compares the cumulative total shareholder return on our common stock during the period from June 30, 2019 through June 30, 2024 to the cumulative total shareholder return during such period on (1) the S&P SmallCap 600 Index and (2) the S&P Food & Beverage Select Industry Index (in which the Company is included).
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 fiscal year ended June 30, 2023, the Company did not repurchase any shares under the repurchase program.
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 fiscal year ended June 30, 2024, the Company did not repurchase any shares under the repurchase program.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Outstanding shares of our common stock, par value $0.01 per share, are listed on The Nasdaq Stock Market LLC under the ticker symbol “HAIN”. Holders As of August 17, 2023, there were 222 holde rs o f record of our common stock.
Item 5. Market for Regist rant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Outstanding shares of our common stock, par value $0.01 per share, are listed on The Nasdaq Stock Market LLC under the ticker symbol “HAIN”. Holders As of August 21, 2024, there were 220 holders of record of our common stock.
See (2) below for further details. (2) In January 2022, the Company's Board of Directors authorized the repurchase of up to $200 million of the Company’s issued and outstanding common stock. Repurchases may be made from time to time in the open market, pursuant to pre-set trading plans, in private transactions or otherwise.
Share Repurchase Program In January 2022, the Company's Board of Directors authorized the repurchase of up to $200 million of the Company’s issued and outstanding common stock. Repurchases may be made from time to time in the open market, pursuant to pre-set trading plans, in private transactions or otherwise. The authorization does not have a stated expiration date.
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Issuance of Unregistered Securities None. Issuer Purchases of Equity Securities The table below sets forth information regarding repurchases by the Company of its common stock during the periods indicated.
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Issuance of Unregistered Securities None. Issuer Purchases of Equity Securities During the three months ended June 30, 2024, there were no shares repurchased under share repurchase programs approved by the Board of Directors.
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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) Approximate dollar value of shares that may yet be purchased under the plans (in millions) (2) April 1, 2023 - April 30, 2023 7,612 $ 21.05 — $ 173.5 May 1, 2023 - May 31, 2023 — — — $ 173.5 June 1, 2023 - June 30, 2023 16,342 12.48 — $ 173.5 Total 23,954 $ 15.21 — (1) Includes shares surrendered for payment of employee payroll taxes due on shares issued under stock-based compensation plans and shares repurchased under share repurchase programs approved by the Board of Directors, if any.
Added
During the three months ended June 30, 2024, there were 4,899 shares withheld by the Company to satisfy tax withholding obligations in connection with shares issued under stock-based compensation plans, at an average price of $6.78 per share. These shares withheld to satisfy tax withholding obligations do not constitute repurchases by the Company.
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In next year’s performance graph, we do not plan to include the S&P 500 Index or the S&P 500 Packaged Foods & Meats Index, which we have historically used as our broad equity market index and our industry or line-of-business index, respectively, for purposes of the stock performance graph.
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In accordance with SEC rules, these indices are included in the performance graph below as we transition to new comparison indices, namely the S&P SmallCap 600 Index and the S&P Food & Beverage Select Industry Index.
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We believe that the S&P SmallCap 600 Index provides a more relevant broad equity market comparison than the S&P 500 Index based on our market capitalization.
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Further, we believe that the S&P Food & Beverage Select Industry Index includes a broader and more representative range of companies (in terms of both market capitalization and specific product categories within the food and beverage sector) than the companies comprising the S&P 500 Packaged Foods & Meats Index and that the S&P Food & Beverage Select Industry Index therefore provides a more relevant comparison against which to compare our cumulative total shareholder return.
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Additionally, certain of our incentive-based compensation awards are based on our total shareholder return relative to that of the S&P Food & Beverage Select Industry Index over the applicable performance period.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeWhile we are continuing to monitor and manage the impacts of the war on our business, the extent to which the Russia-Ukraine war and the related economic impact may affect our financial condition or results of operations in the future remains uncertain. 27 Table of Contents Results of Operations Comparison of Fiscal Yea r E nded June 30, 2023 to Fiscal Ye ar En ded June 30, 2022 Consolidated Results The following table compares our results of operations, including as a percentage of net sales, on a consolidated basis, for the fiscal years ended June 30, 2023 and 2022 (amounts in thousands, other than percentages which may not add due to rounding): Fiscal Year Ended June 30, Change in 2023 2022 Dollars Percentage Net sales $ 1,796,643 100.0 % $ 1,891,793 100.0 % $ (95,150) (5.0) % Cost of sales 1,400,229 77.9 % 1,464,352 77.4 % (64,123) (4.4) % Gross profit 396,414 22.1 % 427,441 22.6 % (31,027) (7.3) % Selling, general and administrative expenses 289,233 16.1 % 300,469 15.9 % (11,236) (3.7) % Intangibles and long-lived asset impairment 175,501 9.8 % 1,903 0.1 % 173,598 ** Amortization of acquired intangible assets 10,016 0.6 % 10,214 0.5 % (198) (1.9) % Productivity and transformation costs 7,284 0.4 % 10,174 0.5 % (2,890) (28.4) % Operating (loss) income (85,620) (4.8) % 104,681 5.5 % (190,301) (181.8) % Interest and other financing expense, net 45,783 2.5 % 12,570 0.7 % 33,213 264.2 % Other income, net (1,822) (0.1) % (11,380) (0.6) % 9,558 (84.0) % (Loss) income before income taxes and equity in net loss of equity-method investees (129,581) (7.2) % 103,491 5.5 % (233,072) * (Benefit) provision for income taxes (14,178) (0.8) % 22,716 1.2 % (36,894) * Equity in net loss of equity-method investees 1,134 0.1 % 2,902 0.2 % (1,768) (60.9) % Net (loss) income $ (116,537) (6.5) % $ 77,873 4.1 % $ (194,410) * Adjusted EBITDA $ 166,622 9.3 % $ 200,616 10.6 % $ (33,994) (16.9) % Diluted net (loss) income per common share $ (1.30) $ 0.83 $ (2.13) * * 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 in fiscal 2023 were $1.80 billion, a decrease of $95.2 million, or 5.0%, from net sales of $1.89 billion in fiscal 2022.
Biggest changeResults of Operations Comparison of Fiscal Year Ended June 30, 2024 to Fiscal Year Ended June 30, 2023 Consolidated Results The following table compares our results of operations, including as a percentage of net sales, on a consolidated basis, for the fiscal years ended June 30, 2024 and 2023 (dollars in thousands, other than per share amounts and percentages, which may not add due to rounding): Fiscal Year Ended June 30, Change in 2024 2023 Dollars Percentage Net sales $ 1,736,286 100.0 % $ 1,796,643 100.0 % $ (60,357 ) (3.4 )% Cost of sales 1,355,454 78.1 % 1,400,229 77.9 % (44,775 ) (3.2 )% Gross profit 380,832 21.9 % 396,414 22.1 % (15,582 ) (3.9 )% Selling, general and administrative expenses 290,116 16.7 % 289,233 16.1 % 883 0.3 % Intangibles and long-lived asset impairment 76,143 4.4 % 175,501 9.8 % (99,358 ) (56.6 )% Productivity and transformation costs 27,741 1.6 % 7,284 0.4 % 20,457 280.8 % Amortization of acquired intangible assets 5,780 0.3 % 10,016 0.6 % (4,236 ) (42.3 )% Operating loss (18,948 ) (1.1 )% (85,620 ) (4.8 )% 66,672 (77.9 )% Interest and other financing expense, net 57,213 3.3 % 45,783 2.5 % 11,430 25.0 % Other expense (income), net 4,120 0.2 % (1,822 ) (0.1 )% 5,942 * Loss before income taxes and equity in net loss of equity-method investees (80,281 ) (4.6 )% (129,581 ) (7.2 )% 49,300 (38.0 )% Benefit for income taxes (7,820 ) (0.5 )% (14,178 ) (0.8 )% 6,358 (44.8 )% Equity in net loss of equity-method investees 2,581 0.1 % 1,134 0.1 % 1,447 127.6 % Net loss $ (75,042 ) (4.3 )% $ (116,537 ) (6.5 )% $ 41,495 (35.6 )% Adjusted EBITDA $ 154,522 8.9 % $ 166,622 9.3 % $ (12,100 ) (7.3 )% Basic and diluted net loss per common share $ (0.84 ) $ (1.30 ) $ 0.46 (35.4 )% * Percentage is not meaningful due to one or more amounts being negative. 28 Table of Contents Net Sales Net sales in fiscal 2024 were $1.74 billion, a decrease of $60.4 million, or 3.4%, from net sales of $1.80 billion in fiscal 2023.
The Credit Agreement provides for senior secured financing of $1,100.0 million in the aggregate, consisting of (1) $300.0 million in aggregate principal amount of term loans (the “Term Loans”) and (2) an $800.0 million senior secured revolving credit facility (which includes borrowing capacity available for letters of credit, and is comprised of a $440.0 million U.S. revolving credit facility and $360.0 million global revolving credit facility) (the “Revolver”).
The Credit Agreement provides for senior secured financing of $1,100 million in the aggregate, consisting of (1) $300 million in aggregate principal amount of term loans (the “Term Loans”) and (2) an $800 million senior secured revolving credit facility (which includes borrowing capacity available for letters of credit, and is comprised of a $440 million U.S. revolving credit facility and $360 million global revolving credit facility) (the “Revolver”).
Following the Second Amendment Period, Loans will bear interest at rates based on (a) Term SOFR plus a rate ranging from 1.125% to 2.0% per annum or (b) the Base Rate plus a rate ranging from 0.125% to 1.0% per annum, the relevant rate in each case being the Applicable Rate.
Following the Second Amendment Period, loans bear interest at rates based on (a) Term SOFR plus a rate ranging from 1.125% to 2.0% per annum or (b) the Base Rate plus a rate ranging from 0.125% to 1.0% per annum, the relevant rate in each case being the Applicable Rate.
Our 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. See Note 11, Income Taxes, in the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K for additional information.
Our effective tax rate may change from period-to-period based on recurring and nonrecurring factors including the geographical mix of earnings, enacted tax legislation, state and local income taxes and tax audit settlements. See Note 11, Income Taxes, in the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K for additional information.
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.
Since capital expenditure 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 expenditure when evaluating our cash flows provided by or used in operating activities.
Forward-looking statements in this Form 10-K are qualified by the cautionary statement included under the heading, “Forward-Looking Statements” at the beginning of this Form 10-K. This MD&A generally discusses fiscal 2023 and fiscal 2022 items and year-to-year comparisons between fiscal 2023 and fiscal 2022.
Forward-looking statements in this Form 10-K are qualified by the cautionary statement included under the heading, “Forward-Looking Statements” at the beginning of this Form 10-K. This MD&A generally discusses fiscal 2024 and fiscal 2023 items and year-to-year comparisons between fiscal 2024 and fiscal 2023.
GAAP Financial Measures to U.S. GAAP Measures following the discussion of our results of operations and Note 19, Segment Information , in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K for a reconciliation of segment Adjusted EBITDA.
GAAP Financial Measures to U.S. GAAP Measures following the discussion of our results of operations and Note 20, Segment Information , in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K for a reconciliation of segment Adjusted EBITDA.
During the fiscal year ended June 30, 2023 , the Company did not repurchase any shares under the repurchase program. As of June 30, 2023, the Company had $173.5 million of remaining authorization under the share repurchase program. Reconciliation of Non-U.S. GAAP Financial Measures to U.S.
During the fiscal year ended June 30, 2024, the Company did not repurchase any shares under the repurchase program. As of June 30, 2024, the Company had $173.5 million of remaining authorization under the share repurchase program. Reconciliation of Non-U.S. GAAP Financial Measures to U.S.
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.
Net Sales - Adjusted for the Impact of Divestitures and Discontinued Brands We exclude the impact of divestitures and discontinued brands when comparing net sales to prior periods, which results in the presentation of certain non-U.S. GAAP financial measures.
Discussions of fiscal 2021 items and year-to-year comparisons between fiscal 2022 and fiscal 2021 that are not included in this Form 10-K can be found in “Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations” of the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2022, which was filed with the SEC on August 25, 2022 and is available on the SEC’s website at www.sec.gov.
Discussions of fiscal 2022 items and year-to-year comparisons between fiscal 2023 and fiscal 2022 that are not included in this Form 10-K can be found in “Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations” of the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2023, which was filed with the SEC on August 24, 2023 and is available on the SEC’s website at www.sec.gov.
The qualitative evaluation is an assessment of factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. We may elect not to perform the qualitative assessment for some or all reporting units and perform a two-step quantitative impairment test.
The qualitative evaluation is an assessment of factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. We may elect not to perform the qualitative assessment for some or all reporting units and instead perform a quantitative impairment test.
Considerable management judgment is necessary to evaluate the impact of operating and external economic factors in estimating our future cash flows. The assumptions we use in our evaluations include projections of growth rates and profitability, our estimated working capital needs, as well as our weighted average cost of capital.
Considerable management judgment is necessary to evaluate the impact of operating and external economic factors in estimating our future cash flows. The assumptions we use in our tests include projections of growth rates and profitability, our estimated working capital needs, as well as our weighted average cost of capital (“WACC”).
We view Operating Free Cash Flows 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 in isolation or as an alternative to financial measures determined in accordance with U.S. GAAP.
We view Free Cash Flow as an important measure because it is one factor in evaluating the amount of cash available for discretionary investments. We do not consider Free Cash Flow in isolation or as an alternative to financial measures determined in accordance with U.S. GAAP.
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. 35 Table of Contents Adjusted EBITDA in connection with 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 reporting unit represents an operating segment or a component of an operating segment. Goodwill is tested for impairment by either performing a qualitative evaluation or a two-step quantitative test.
A reporting unit represents an operating segment or a component of an operating segment. Goodwill is tested for impairment by either performing a qualitative evaluation or a quantitative test.
For awards that contain a market condition, expense is recognized over the defined or derived service period using a Monte Carlo simulation model. Valuation Allowances for Deferred Tax Assets Deferred tax assets arise when we recognize expenses in our financial statements that will be allowed as income tax deductions in future periods.
For awards that contain a market condition, expense is recognized over the defined or derived service period using a Monte Carlo simulation model. 38 Table of Contents Valuation Allowances for Deferred Tax Assets Deferred tax assets arise when we recognize expenses in our financial statements that will be allowed as income tax deductions in future periods.
Following the Second Amendment Period, the maximum consolidated secured leverage ratio will be 4.25 to 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 to 1.00.
Following the Second Amendment Period, the maximum consolidated secured leverage ratio will be 4.25:1.00, subject to possible temporary increase following certain corporate acquisitions. Pursuant to the Credit Agreement, the Company’s maximum consolidated leverage ratio is 6.00:1.00. Pursuant to the Second Amendment, the Company’s minimum interest coverage ratio was amended to be 2.50:1.00.
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. 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.
GAAP Measures following the discussion of our results of operations for definitions and a reconciliation from our net cash provided by operating activities to Free Cash 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.
During the Second Amendment Period, loans under the Credit Agreement will bear interest at (a) Term SOFR plus 2.5% per annum or (b) the Base Rate plus 1.5% per annum.
During the Second Amendment Period, loans under the Credit Agreement bears interest at (a) Term SOFR plus 2.5% per annum or (b) the Base Rate plus 1.5% per annum.
In recent years, net sales and diluted earnings per share in the first fiscal quarter have typically been the lowest of our four quarters. 39 Table of Contents
Historically, net sales and diluted earnings per share in the first fiscal quarter have typically been the lowest of our four quarters. 39 Table of Contents
Item 7. 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 (this “MD&A”) should be read in conjunction with Item 1A and the Consolidated Financial Statements and the related notes thereto for the period ended June 30, 2023 included in Item 8 of this Form 10-K.
Management’s Discussi on and Analysis of Financial Condition and Results of Operations This Management’s Discussion and Analysis of Financial Condition and Results of Operations (this “MD&A”) should be read in conjunction with Item 1A and the Consolidated Financial Statements and the related notes thereto for the period ended June 30, 2024 included in Item 8 of this Form 10-K.
Adjusted EBITDA Our consolidated Adjusted EBITDA was $166.6 million and $200.6 million for fiscal 2023 and 2022, respectively, as a result of the factors discussed above. See Reconciliation of Non-U.S. GAAP Financial Measures to U.S.
Adjusted EBITDA Our consolidated Adjusted EBITDA was $154.5 million and $166.6 million for fiscal 2024 and 2023, respectively, as a result of the factors discussed above. See Reconciliation of Non-U.S. GAAP Financial Measures to U.S.
Refer to Note 19, Segm ent Information , in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K for additional details. 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).
Refer to Note 20, Segment Information , in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K for additional details. 31 Table of Contents 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).
Pursuant to the Second Amendment, the Company’s maximum consolidated secured leverage ratio was amended to be 5.00 to 1.00 until September 30, 2023, 5.25 to 1.00 until December 31, 2023 and 5.00 to 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).
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”).
See Note 8, Goodwill and Other Intangible Assets and Note 15, Fair Value Measurements , in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K.
See Note 6, Property, Plant and Equipment, Net , Note 8, Goodwill and Other Intangible Assets and Note 15, Fair Value Measurements , in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K.
Intangibles and Long-Lived Asset Impairment During fiscal 2023, the Company recognized an aggregate non-cash impairment charge of $175.5 million, primarily related to the ParmCrisps ® , Thinsters ® , Imagine ® , Joya ® , and Queen Helene ® indefinite-lived trademarks and ParmCrisps ® definite lived customer relationships, which reduced the carrying value of such assets to their estimated fair value.
During the fiscal year ended June 30, 2023, the Company recognized aggregate non-cash impairment charges of $175.5 million, primarily related to the ParmCrisps ® , Thinsters ® , Imagine ® , Joya ® , and Queen Helene ® indefinite-lived trademarks and ParmCrisps ® definite lived customer relationships, which reduced the carrying value of such assets to their estimated fair value.
Goodwill and Intangible Assets Goodwill and intangible assets deemed to have indefinite lives are not amortized but rather are tested at least annually for impairment, or more often if events or changes in circumstances indicate that more likely than not the carrying amount of the asset may not be recoverable. Goodwill is tested for impairment at the reporting unit level.
Goodwill Goodwill is not amortized but rather is tested at least annually for impairment, or more often if events or changes in circumstances indicate that more likely than not the carrying amount of the asset may not be recoverable. Goodwill is tested for impairment at the reporting unit level.
A reconciliation from cash flows provided by operating activities to Operating Free Cash Flows is as follows: Fiscal Year Ended June 30, (Amounts in thousands) 2023 2022 Net cash provided by operating activities $ 66,819 $ 80,241 Purchases of property, plant and equipment (27,879) (39,965) Operating free cash flows $ 38,940 $ 40,276 Contractual Obligations We are party to contractual obligations involving commitments to make payments to third parties, which impact our short-term and long-term liquidity and capital resource needs.
A reconciliation from cash flows provided by operating activities to Free Cash Flow is as follows: Fiscal Year Ended June 30, (Amounts in thousands) 2024 2023 Net cash provided by operating activities $ 116,355 $ 66,819 Purchases of property, plant and equipment (33,461 ) (27,879 ) Free Cash Flow $ 82,894 $ 38,940 Contractual Obligations We are party to contractual obligations involving commitments to make payments to third parties, which impact our short-term and long-term liquidity and capital resource needs.
Equity in Net Loss of Equity-Method Investees Our equity in the net loss from our equity method investments for fiscal 2023 was $1.1 million compared to $2.9 million for fiscal 2022. See Note 14, Investments , in the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K.
Equity in Net Loss of Equity-Method Investees Our equity in the net loss from our equity method investments for fiscal 2024 was $2.6 million compared to $1.1 million for fiscal 2023. The change was attributable to higher investee losses. See Note 14, Investments , in the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K.
The difference between Operating Free Cash Flows and cash flows provided by or used in operating activities, which is the most comparable U.S. GAAP financial measure, is that Operating Free Cash Flows reflects the impact of purchases of property, plant and equipment (capital spending).
Free Cash Flow In our internal evaluations, we use the non-GAAP financial measure “Free Cash Flow.” The difference between Free Cash Flow and cash flows provided by or used in operating activities, which is the most comparable U.S. GAAP financial measure, is that Free Cash Flow reflects the impact of purchases of property, plant and equipment (capital expenditure).
On August 22, 2023, the Company entered into a Second Amendment (the “Second Amendment”) to the Credit Agreement.
Amended and Restated Credit Agreement On August 22, 2023, the Company entered into a Second Amendment (the “Second Amendment”) to the Credit Agreement (as amended, the “Credit Agreement”).
Net (Loss) Income Net loss for fiscal 2023 was $116.5 million compared to net income of $77.9 million for fiscal 2022. Net loss per diluted share was $1.30 in fiscal 2023 compared to net income per diluted share $0.83 in 2022. The change was attributable to the factors noted above.
Net Loss Net loss for fiscal 2024 was $75.0 million, or $0.84 per diluted share, compared to $116.5 million, or $1.30 per diluted share, in fiscal 2023. The change was attributable to the factors noted above.
As of June 30, 2023, substantially all cash was held outside of the United States. We maintain our cash and cash equivalents primarily in money market funds or their equivalent. Accordingly, we do not believe that our investments have significant exposure to interest rate risk. Cash provided by (used in) operating, investing and financing activities is summarized below.
As of June 30, 2024, substantially all cash was held outside of the U.S. We maintain our cash and cash equivalents primarily in money market funds or their equivalent. Accordingly, we do not believe that our investments have significant exposure to interest rate risk.
Additionally, our total debt decreased by $59.9 million at June 30, 2023 to $828.7 million as compared to $888.6 million at June 30, 2022 as a result of $59.5 million of net repayments carried out during the year. Our cash balances are held in the United States, United Kingdom, Canada, Europe, the Middle East and India.
Additionally, our total debt decreased by $84.7 million at June 30, 2024 to $744.1 million as compared to $828.7 million at June 30, 2023 as a result of net repayments carried out during the year. Our cash balances are held in the U.S., U.K., Canada, Western Europe, the Middle East and India.
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 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.
The use of the Monte Carlo simulation model requires the Company to make estimates and assumptions, such as expected volatility, expected term and risk-free interest rate. The fair value of stock-based compensation awards is recognized as an expense over the vesting period using the straight-line method.
Stock-based Compensation The Company utilizes a Monte Carlo simulation model to determine the fair value of market-based awards. The use of the Monte Carlo simulation model requires the Company to make estimates and assumptions, such as expected volatility, expected term and risk-free interest rate.
The Applicable Rate following the First Amendment Period would be determined in accordance with a leverage-based pricing grid, as set forth in the Credit Agreement. The weighted average interest rate on outstanding borrowings under the Credit Agreement at June 30, 2023 was 5.94%.
The Applicable Rate following the Second Amendment Period is determined in accordance with a leverage-based pricing grid, as set forth in the Credit Agreement as amended by the Second Amendment. Excluding the impact of hedges, the weighted average interest rate on outstanding borrowings under the Credit Agreement at June 30, 2024 was 7.97%.
A reconciliation of net (loss) income to Adjusted EBITDA is as follows: Fiscal Year Ended June 30, (Amounts in thousands) 2023 2022 Net (loss) income $ (116,537) $ 77,873 Depreciation and amortization 50,777 46,849 Equity in net loss of equity-method investees 1,134 2,902 Interest expense, net 43,936 10,226 (Benefit) provision for income taxes (14,178) 22,716 Stock-based compensation, net 14,423 15,611 Unrealized currency losses (gains) 929 (2,259) Litigation and related costs (a) (1,369) 7,687 Restructuring activities CEO succession 5,113 — Plant closure related costs, net 94 929 Productivity and transformation costs 7,284 8,803 Warehouse/manufacturing consolidation and other costs, net 1,026 2,721 Acquisitions, divestitures and other Transaction and integration costs, net 2,018 14,055 Gain on sale of assets (3,529) (9,049) Impairment charges Inventory write-down — (351) Intangibles and long-lived asset impairment 175,501 1,903 Adjusted EBITDA $ 166,622 $ 200,616 (a) Expenses and items relating to securities class action and baby food litigation.
A reconciliation of net loss to Adjusted EBITDA is as follows: 34 Table of Contents Fiscal Year Ended June 30, (Amounts in thousands) 2024 2023 Net loss $ (75,042 ) $ (116,537 ) Depreciation and amortization 44,665 50,777 Equity in net loss of equity-method investees 2,581 1,134 Interest expense, net 54,232 43,936 Benefit for income taxes (7,820 ) (14,178 ) Stock-based compensation, net 12,704 14,423 Unrealized currency losses 17 929 Litigation and related costs (a) 7,262 (1,369 ) Restructuring activities Productivity and transformation costs 27,741 7,284 Plant closure related costs, net 5,251 94 Warehouse/manufacturing consolidation and other costs, net 995 1,026 CEO succession — 5,113 Acquisitions, divestitures and other Loss (gain) on sale of assets 4,384 (3,529 ) Transaction and integration costs, net (34 ) 2,018 Impairment charges Intangibles and long-lived asset impairment 76,143 175,501 Other 1,443 — Adjusted EBITDA $ 154,522 $ 166,622 (a) Expenses and items relating to securities class action, baby food litigation, and SEC investigation.
The Company completed its annual goodwill impairment analysis in the fourth quarter of fiscal 2023, in conjunction with its budgeting and forecasting process for fiscal year 2024 and concluded that no indicators of impairment existed at any of its reporting units. As of June 30, 2023, the carrying value of goodwill was $938.6 million.
The Company completed its annual goodwill impairment test on the first day of the fourth quarter of fiscal 2024, in conjunction with its budgeting and forecasting process for fiscal year 2025 and concluded that no impairment existed at any of its reporting units.
Critical Accounting Estimates The discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which are prepared in accordance with accounting principles generally accepted in the United States.
See Note 7, Leases , and Note 10, Debt and Borrowings , in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K. 35 Table of Contents Critical Accounting Estimates The discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which are prepared in accordance with accounting principles generally accepted in the United States.
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 Measures Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). 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.
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. The Company is a leading manufacturer, marketer, and seller of better-for-you brands that inspire healthier living.
Overview The Hain Celestial Group, Inc., a Delaware corporation (collectively with its subsidiaries, the “Company,” “Hain Celestial,” “we,” “us” or “our”) is a leading global health and wellness company whose purpose is to inspire healthier living for people, communities and the planet through better-for-you brands.
The Company's management believes that excluding the impact of acquisitions, divestitures and discontinued brands when presenting period-over-period results of net sales aids in comparability.
The Company’s management believes that excluding the impact of divestitures and discontinued brands when presenting period-over-period results of net sales aids in comparability. 33 Table of Contents 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.
Differences between estimated expense and actual promotion and incentive costs are recognized in earnings in the period such differences are determined.
Differences between estimated expense and actual promotion and incentive costs are recognized in earnings in the period such differences are determined. Actual expenses may differ if the level of redemption rates and performance were to vary from estimates.
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. 34 Table of Contents 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 - Twelve months ended 6/30/23 $ 1,139,162 $ 657,481 $ 1,796,643 Acquisitions, divestitures and discontinued brands (34,659) — (34,659) Impact of foreign currency exchange 6,560 64,053 70,613 Net sales on a constant currency basis adjusted for acquisitions, divestitures and discontinued brands - Twelve months ended 6/30/23 $ 1,111,063 $ 721,534 $ 1,832,597 Net sales - Twelve months ended 6/30/22 $ 1,163,132 $ 728,661 $ 1,891,793 Acquisitions, divestitures and discontinued brands (8,109) — (8,109) Net sales adjusted for divestitures and discontinued brands - Twelve months ended 6/30/22 $ 1,155,023 $ 728,661 $ 1,883,684 Net sales decline (2.1) % (9.8) % (5.0) % Impact of acquisitions, divestitures and discontinued brands (2.3) % — % (1.4) % Impact of foreign currency exchange 0.6 % 8.8 % 3.7 % Net sales decline on a constant currency basis adjusted for acquisitions, divestitures and discontinued brands (3.8) % (1.0) % (2.7) % Adjusted EBITDA The Company defines Adjusted EBITDA as net (loss) income before net interest expense, income taxes, depreciation and amortization, equity in net loss of equity-method investees, stock-based compensation, net, unrealized currency losses (gains), certain litigation and related costs, CEO succession costs, plant closure related costs-net, productivity and transformation costs, warehouse and manufacturing consolidation and other costs, costs associated with acquisitions, divestitures and other transactions, gains on sales of assets, certain inventory write-downs, intangibles and long-lived asset impairment and other adjustments.
A reconciliation between reported net sales and net sales adjusted for the impact of divestitures and discontinued brands is as follows: (Dollars in thousands) North America International Hain Consolidated Net sales - Twelve months ended 6/30/24 $ 1,055,527 $ 680,759 $ 1,736,286 Divestitures and discontinued brands (19,519 ) (1,682 ) (21,201 ) Net sales adjusted for divestitures and discontinued brands - Twelve months ended 6/30/24 $ 1,036,008 $ 679,077 $ 1,715,085 Net sales - Twelve months ended 6/30/23 $ 1,139,162 $ 657,481 $ 1,796,643 Divestitures and discontinued brands (36,093 ) (2,662 ) (38,755 ) Net sales adjusted for divestitures and discontinued brands - Twelve months ended 6/30/23 $ 1,103,069 $ 654,819 $ 1,757,888 Net sales (decline) growth (7.3 )% 3.5 % (3.4 )% Impact of divestitures and discontinued brands 1.2 % 0.2 % 1.0 % Net sales (decline) growth adjusted for divestitures and discontinued brands (6.1 )% 3.7 % (2.4 )% Adjusted EBITDA The Company defines Adjusted EBITDA as net loss before net interest expense, income taxes, depreciation and amortization, equity in net loss of equity-method investees, stock-based compensation, net, unrealized currency losses (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, net, costs associated with acquisitions, divestitures and other transactions, losses (gains) on sales of assets, intangibles and long-lived asset impairment and other adjustments.
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 $14.2 million for fiscal 2023 compared to expense of $22.7 million for fiscal 2022.
Benefit for Income Taxes The benefit for income taxes includes federal, foreign, state and local income taxes. Our income tax benefit was $7.8 million for fiscal 2024 compared to $14.2 million for fiscal 2023. The effective income tax rate was 9.7% and 10.9% of pre-tax income for the fiscal year ended June 30, 2024 and 2023, respectively.
If assumptions are not achieved or market conditions decline, potential impairment charges could result. The Company will continue to monitor impairment indicators and financial results in future periods.
If assumptions are not achieved or market conditions decline, potential impairment charges could result.
Actual expenses may differ if the level of redemption rates and performance were to vary from estimates. 37 Table of Contents Valuation of Long-lived Assets Fixed assets and amortizable intangible assets are reviewed for impairment as events or changes in circumstances occur indicating that the carrying value of the asset may not be recoverable.
Valuation of Long-lived Assets Fixed assets and amortizable intangible assets are reviewed for impairment as events or changes in circumstances occur indicating that the carrying value of the asset may not be recoverable. Undiscounted cash flow analyses are used to determine if impairment exists. If impairment is determined to exist, the loss is calculated based on estimated fair value.
As of June 30, 2023, there were $541.0 million of loans under the Revolver, $288.8 million of Term Loans, and $4.5 million letters of credit outstanding under the Credit Agreement.
As of June 30, 2024, there were $475.0 million of loans under the Revolver, $270.6 million of Term Loans, and $3.2 million of letters of credit outstanding under the Credit Agreement. As of June 30, 2024 and June 30, 2023, $321.8 million and $254.5 million, respectively, was available under the Credit Agreement, subject to compliance with the financial covenants.
The following table provides a summary of net sales and Adjusted EBITDA by reportable segment for the fiscal years ended June 30, 2023 and 2022: (Amounts in thousands) North America International Corporate and Other Consolidated Fiscal 2023 net sales $ 1,139,162 $ 657,481 $ — $ 1,796,643 Fiscal 2022 net sales $ 1,163,132 $ 728,661 $ — $ 1,891,793 $ change $ (23,970) $ (71,180) n/a $ (95,150) % change (2.1) % (9.8) % n/a (5.0) % Fiscal 2023 Adjusted EBITDA $ 123,443 $ 82,945 $ (39,766) $ 166,622 Fiscal 2022 Adjusted EBITDA $ 122,235 $ 110,073 $ (31,692) $ 200,616 $ change $ 1,208 $ (27,128) $ (8,074) $ (33,994) % change 1.0 % (24.6) % (25.5) % (16.9) % Fiscal 2023 Adjusted EBITDA margin 10.8 % 12.6 % n/a 9.3 % Fiscal 2022 Adjusted EBITDA margin 10.5 % 15.1 % n/a 10.6 % See the Reconciliation of Non-U.S.
GAAP Measures following the discussion of our results of operations for definitions and a reconciliation of our net income to Adjusted EBITDA. 30 Table of Contents Segment Results The following table provides a summary of net sales and Adjusted EBITDA by reportable segment for the fiscal years ended June 30, 2024 and 2023: (Dollars in thousands) North America International Corporate and Other Consolidated Net Sales Fiscal 2024 $ 1,055,527 $ 680,759 $ — $ 1,736,286 Fiscal 2023 $ 1,139,162 $ 657,481 $ — $ 1,796,643 $ change $ (83,635 ) $ 23,278 n/a $ (60,357 ) % change (7.3 )% 3.5 % n/a (3.4 )% Adjusted EBITDA Fiscal 2024 $ 98,728 $ 94,974 $ (39,180 ) $ 154,522 Fiscal 2023 $ 123,443 $ 82,945 $ (39,766 ) $ 166,622 $ change $ (24,715 ) $ 12,029 $ 586 $ (12,100 ) % change (20.0 )% 14.5 % 1.5 % (7.3 )% Adjusted EBITDA margin Fiscal 2024 9.4 % 14.0 % n/a 8.9 % Fiscal 2023 10.8 % 12.6 % n/a 9.3 % See the Reconciliation of Non-U.S.
Amortization of Acquired Intangible Assets Amortization of acquired intangible assets was $10.0 million in fiscal 2023, a decrease of $0.2 million, or 1.9%, from $10.2 million in fiscal 2022, primarily reflecting reduced amortization expenses due to impairment of the ParmCrisps customer relationships recognized in the third quarter of 2023 (see Note 8, Goodwill and Other Intangible Assets , in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K), partially offset by an increase in amortization expenses associated with the acquisition of THWR in the second quarter of the prior fiscal year.
Amortization of Acquired Intangible Assets Amortization of acquired intangible assets was $5.8 million in fiscal 2024, a decrease of $4.2 million, or 42.3%, from $10.0 million in fiscal 2023, primarily reflecting reduced amortization expenses due to impairment of the ParmCrisps ® customer relationships recognized in the third quarter of fiscal 2023.
Fiscal Year Ended June 30, (Amounts in thousands) 2023 2022 Cash flows provided by (used in): Operating activities $ 66,819 $ 80,241 Investing activities (19,640) (288,309) Financing activities (63,060) 212,787 Effect of exchange rate changes on cash 3,733 (15,078) Net decrease in cash and cash equivalents $ (12,148) $ (10,359) Cash provided by operating activities was $66.8 million for the fiscal year ended June 30, 2023, compared to $80.2 million in fiscal 2022.
Cash provided by (used in) operating, investing and financing activities is summarized below. 32 Table of Contents Fiscal Year Ended June 30, (Amounts in thousands) 2024 2023 Change in Dollars Cash flows provided by (used in): Operating activities $ 116,355 $ 66,819 $ 49,536 Investing activities (23,922 ) (19,640 ) (4,282 ) Financing activities (89,729 ) (63,060 ) (26,669 ) Effect of exchange rate changes on cash (1,761 ) 3,733 (5,494 ) Net increase (decrease) in cash and cash equivalents $ 943 $ (12,148 ) $ 13,091 Cash provided by operating activities was $116.4 million for the fiscal year ended June 30, 2024, an increase of $49.5 million from $66.8 million in the prior year.
A valuation allowance must be recorded against a deferred tax asset if this test cannot be met. Our determination of our valuation allowances is based upon a number of assumptions, judgments and estimates, including forecasted earnings, future taxable income and the relative proportions of revenue and income before taxes in the various jurisdictions in which we operate.
A valuation allowance must be recorded against a deferred tax asset if they are not realizable after considering the four sources of income. Our determination of our valuation allowances is based upon a number of assumptions, judgments and estimates, including the reversal pattern of existing temporary differences and forecasted earnings.
Holding all other assumptions used in the 2023 fair value measurement constant, a 100-basis-point increase in the weighted average cost of capital would not result in the carrying value of the reporting units to be in excess of the fair value. The fair values were based on significant management assumptions including an estimate of future cash flows.
The estimated fair value of the U.S. reporting unit exceeded its carrying value based on the testing performed. Holding all other assumptions used in the 2024 fair value measurement constant, a 50-basis-point increase in the WACC would not result in the carrying value of the reporting unit to be in excess of the fair value.
Operating Free Cash Flows Our operating free cash flow was $38.9 million for fiscal 2023, a decrease of $1.3 million from fiscal 2022. The decrease in operating free cash flow primarily resulted a decrease in cash flow from operations of $13.4 million driven by the reasons explained above, partially offset by reduction in capital expenditures. See the Reconciliation of Non-U.S.
The increase in Free Cash Flow primarily resulted from an increase in cash flow provided by operations of $49.5 million driven by the reasons explained above, partially offset by higher capital expenditures. See the Reconciliation of Non-U.S. GAAP Financial Measures to U.S.
North America Our net sales in the North America reportable segment for fiscal 2023 were $1.14 billion, a decrease of $24.0 million, or 2.1%, from net sales of $1.16 billion in fiscal 2022. On a constant currency basis, adjusted for the impact of acquisitions, divestitures and discontinued brands, net sales decreased by 3.8%.
North America Our net sales in the North America reportable segment for fiscal 2024 were $1.1 billion, a decrease of $83.6 million, or 7.3%, from net sales of $1.1 billion in fiscal 2023.
If the carrying value of the indefinite-lived intangible assets exceeds the fair value of the assets, the carrying value is written down to fair value in the period identified.
If the carrying value of the indefinite-lived intangible assets exceeds the fair value of the assets, the carrying value is written down to fair value in the period identified. The Company performs an indefinite-lived asset impairment test annually and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired.
On a constant currency basis, adjusted for the impact of acquisitions, divestitures and discontinued brands, net sales decreased approximately $51.1 million, or 2.7% from the prior comparable period. The decrease in net sales was primarily driven by the North America reportable segment. Further details of changes in adjusted net sales by segment are provided below in the Segment Results section.
Net sales, adjusted for the impact of divestitures and discontinued brands, decreased approximately $42.8 million, or 2.4%, from the prior year. The decrease in both net sales and adjusted net sales was due to a decline in the North America reportable segment, partially offset by growth in the International reportable segment.
Deferred tax assets also include unused tax net operating losses and tax credits that we are allowed to carry forward to future years. Accounting rules permit us to carry deferred tax assets on the balance sheet at full value as long as it is “more likely than not” that the deductions, losses or credits will be used in the future.
Deferred tax assets also include unused tax net operating losses and tax credits that we are allowed to carry forward to future years.
The Company’s food and beverage brands include Celestial Seasonings ® , Clarks™, Cully & Sully ® , Earth’s Best ® , Ella’s Kitchen ® , Frank Cooper’s ® , Garden of Eatin’ ® , Garden Veggie™, Hartley’s ® , Health Valley ® , Imagine ® , Joya ® , Lima ® , Linda McCartney’s ® (under license), MaraNatha ® , Natumi ® , New Covent Garden Soup Co. ® , ParmCrisps ® , Robertson’s ® , Rose’s ® (under license), Sensible Portions ® , Spectrum ® , Sun-Pat ® , Terra ® , The Greek Gods ® , Thinsters ® , Yorkshire Provender ® and Yves Veggie Cuisine ® .
The Company's leading brands include Garden Veggie Snacks™, Terra ® chips, Garden of Eatin' ® snacks, Hartley’s ® Jelly, Earth's Best ® and Ella's Kitchen ® baby and kids foods, Celestial Seasonings ® teas, Joya ® and Natumi ® plant-based beverages, Greek Gods ® yogurt, Cully & Sully ® , Yorkshire Provender ® , New Covent Garden ® and Imagine ® soups, Yves ® and Linda McCartney's ® (under license) meat-free, and Avalon Organics ® personal care, among others.
The effective income tax rate for the year ended June 30, 2023 was primarily impacted by establishment of federal valuation allowance against the Company’s tax losses and credits, an increase in the state valuation allowance related to the Company’s state deferred tax assets and state net operating loss carryforwards, an increase related to the sale of Westbrae Natural ® brand (“Westbrae”) and stock-based compensation.
The effective income tax rate for the twelve months ended June 30, 2023 was primarily impacted by the establishment of federal valuation allowances against the Company's deferred tax assets offset by foreign earnings.
Our contractual obligations primarily consist of long-term debt and related interest payments, purchase commitments and operating leases. See Note 7, Leases , and Note 10, Debt and Borrowings , in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K.
Our contractual obligations primarily consist of long-term debt and related interest payments and operating leases.
The decrease in income was primarily attributable to the recognition of an $8.7 million gain on sale of assets in the prior year related to the sale of undeveloped land plots in Boulder, Colorado. 29 Table of Contents (Loss) Income Before Income Taxes and Equity in Net Loss of Equity-Method Investees Loss before income taxes and equity in the net loss of our equity-method investees for fiscal 2023 was $129.6 million compared to income of $103.5 million in fiscal 2022.
Loss Before Income Taxes and Equity in Net Loss of Equity-Method Investees Loss before income taxes and equity in the net loss of our equity-method investees for fiscal 2024 was $80.3 million compared to $129.6 million in fiscal 2023. The decrease was due to the items discussed above.
Our working capital was $358.9 million at June 30, 2023, an increase of $29.9 million from $329.0 million at the end of fiscal 2022.
Our cash and cash equivalents balance increased $0.9 million at June 30, 2024 to $54.3 million as compared to $53.4 million at June 30, 2023. Our working capital was $275.6 million at June 30, 2024, a decrease of $83.4 million from $358.9 million at the end of fiscal 2023.
Both the Revolver and the Term Loans mature on December 22, 2026. The Credit Agreement includes financial covenants that require compliance with a consolidated interest coverage ratio, a consolidated leverage ratio and a consolidated secured leverage ratio. Prior to the Company entering into the Second Amendment (as defined below), the minimum consolidated interest coverage ratio was 2.75:1.00.
The Credit Agreement includes financial covenants that require compliance with a consolidated secured leverage ratio, a consolidated leverage ratio and a consolidated interest coverage ratio.
The estimate of the fair values of our reporting units are based on the best information available as of the date of the assessment. We generally use a blended analysis of the present value of discounted cash flows and the market valuation approach. The discounted cash flow model uses the present values of estimated future cash flows.
We generally use a blended analysis of the Discounted Cash Flow (“DCF”) method income approach and the Guideline Public Company Method (“GPCM”) market approach. The DCF method estimates the value based on the present value of estimated future cash flows and economic benefits that are expected to be produced.
The decrease primarily reflected reduced costs in Corporate and Other and the International reportable segment. The decrease in the International reportable segment was primarily a result of lower employee-related expenses in the Europe and the United Kingdom, partially offset by higher selling expenses in the United Kingdom.
The modest increase was primarily due to higher employee compensation-related expenses partially offset by a decrease in selling expenses.
Gross Profit Gross profit in fiscal 2023 w as $396.4 million, a decrease of $31.0 million, or 7.3%, from gross profit of $427.4 million in fiscal 2022. Gross profit margin was 22.1% of net sales, compared to 22.6% in the prior year. The decrease in gross profit margin was primarily due to the International reportable segment.
Gross profit in the International reportable segment increased during the fiscal year 2024 compared to the prior year, mainly driven by higher net sales due to pricing. Selling, General and Administrative Expenses Selling, general and administrative expenses were $290.1 million in fiscal 2024, an increase of $0.9 million, or 0.3%, from $289.2 million in fiscal 2023.
See Note 7, Leases , in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q. Our cash and cash equivalents balance decreased $12.1 million at June 30, 2023 to $53.4 million as compared to $65.5 million at June 30, 2022.
See Note 4, Dispositions , in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K. Cash used in financing activities was $89.7 million for the fiscal year ended June 30, 2024, an increase of $26.7 million compared to $63.1 million in the prior year.
The increase resulted primarily from rising interest rates and a higher outstanding debt balance driven primarily by the acquisition of THWR and share repurchase activity during fiscal 2022. See Note 10, Debt and Borrowings , in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K.
See Note 10, Debt and Borrowings , in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K. Other Expense (Income), Net Other expense, net totaled $4.1 million in fiscal 2024 compared to other income, net of $1.8 million in the prior year.
Fiscal 2023 Adjusted EBITDA on a constant currency basis decreased 18.3% from the prior year. The decrease was driven by higher energy and supply chain costs, partially offset by pricing and productivity. Adjusted EBITDA margin was 12.6%, a 250-basis point decline from the prior year.
Adjusted EBITDA in fiscal 2024 was $98.7 million, a decrease of $24.7 million from $123.4 million in fiscal 2023. The decrease was primarily driven by lower volume and inflation, partially offset by pricing. Adjusted EBITDA margin was 9.4%, a 148-basis point decrease from the prior year.
Operating (Loss) Income Operating loss in fiscal 2023 was $85.6 million compared to operating income of $104.7 million in fiscal 2022 due to the items described above. Interest and Other Financing Expense, Net Interest and other financing expense, net totaled $45.8 million in fiscal 2023, an increase of $33.2 million, or 264.2%, from $12.6 million in the prior year.
Interest and Other Financing Expense, Net Interest and other financing expense, net totaled $57.2 million in fiscal 2024, an increase of $11.4 million, or 25.0%, from $45.8 million in the prior year. The increase resulted primarily from higher borrowing rates, partially offset by a lower outstanding debt balance compared to the prior year.
We first assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired. We measure the fair value of these assets using the relief from royalty method. This method assumes that the tradenames and trademarks have value to the extent their owner is relieved from paying royalties for the benefits received.
If an entity elects to perform a qualitative assessment, it first shall assess qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that an indefinite-lived intangible asset is impaired.
Adjusted EBITDA margin on a constant currency basis was 12.5%, a 265-basis point decline from the prior year. Corporate and Other The increase in Corporate and Other expenses primarily reflected an increase in compensation-related expenses.
The increase was primarily driven by pricing and deflation, partially offset by lower volumes. Adjusted EBITDA margin was 14.0%, a 134-basis point increase from the prior year. Corporate and Other Corporate and Other expenses remained relatively flat compared to fiscal 2023.
During the year ended June 30, 2023, the Company recorded aggregate non-cash impairment charges of $174.9 million related to certain trademarks and intangible assets as discussed in Note 8, Goodwill and Other Intangible Assets , in the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K. 38 Table of Contents Business Combinations During the year ended June 30, 2022, the Company completed the acquisition of THWR for total consideration of $260.2 million, net of cash acquired.
See Note 8, Goodwill and Other Intangible Assets , in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K. 29 Table of Contents Operating Loss Operating loss in fiscal 2024 was $18.9 million compared to $85.6 million in fiscal 2023 due to the items described above.
Adjusted EBITDA margin on a constant currency basis was 10.8%, a 30-basis point improvement from the prior year. 31 Table of Contents International Net sales in the International reportable segment for fiscal 2023 were $657.5 million, a decrease of $71.2 million, or 9.8%, from net sales of $728.7 million in fiscal 2022.
International Net sales in the International reportable segment for fiscal 2024 were $680.8 million, an increase of $23.3 million, or 3.5%, from net sales of $657.5 million in fiscal 2023. The increase reflected 4.2% of growth from the favorable impact of foreign currency exchange rates.
Changes in economic and operating conditions impacting the assumptions we made could result in additional goodwill impairment in future periods. If the carrying value of the reporting unit exceeds fair value, goodwill is considered impaired.
If the carrying amount of a reporting unit exceeds its fair value, goodwill is considered impaired. A goodwill impairment loss is recognized for the amount that the carrying amount of a reporting unit exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit.
Removed
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.
Added
For more than 30 years, Hain Celestial has intentionally focused on delivering nutrition and well-being that positively impacts today and tomorrow. Headquartered in Hoboken, N.J., Hain Celestial's products across snacks, baby & kids, beverages, meal preparation, and personal care, are marketed and sold in over 70 countries around the world.
Removed
The Company’s personal care brands include Alba Botanica ® , Avalon Organics ® , JASON ® , Live Clean ® and Queen Helene ® .

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThese amounts were determined by considering the impact of a hypothetical foreign exchange rate on the sales and operating income of the Company’s international operations. Fluctuations in currency exchange rates may also impact the Stockholders’ Equity of the Company.
Biggest changeSales and operating income would have decreased by approximately $39.3 million and $3.2 million, respectively, if average foreign exchange rates had been lower by 5% against the U.S. Dollar in fiscal 2024. These amounts were determined by considering the impact of a hypothetical foreign exchange rate on the sales and operating income of the Company’s international operations.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Market Risk The principal market risks (i.e., the risk of loss arising from adverse changes in market rates and prices) to which the Company is exposed are: • interest rates on debt and cash equivalents; • foreign exchange rates, generating translation and transaction gains and losses; and • ingredient inputs.
Item 7A. Quantitative an d Qualitative Disclosures About Market Risk Market Risk The principal market risks (i.e., the risk of loss arising from adverse changes in market rates and prices) to which the Company is exposed are: • interest rates on debt and cash equivalents; • foreign exchange rates, generating translation and transaction gains and losses; and • ingredient inputs.
These agreements are tied to specific market prices. Market risk is estimated as a hypothetical 10% increase or decrease in the weighted average cost of our primary inputs as of June 30, 2023.
These agreements are tied to specific market prices. Market risk is estimated as a hypothetical 10% increase or decrease in the weighted average cost of our primary inputs as of June 30, 2024.
Although we sometimes hedge against fluctuations in the prices of the ingredients by using future or forward contracts or similar instruments, the ma jority of our future purchases of these items are subject to changes in price. We may enter into fixed purchase commitments in an attempt to secure an adequate supply of specific ingredients.
Although we sometimes hedge against fluctuations in the prices of the ingredients by using future or forward contracts or similar instruments, the majority of our future purchases of these items are subject to changes in price. We may enter into fixed purchase commitments in an attempt to secure an adequate supply of specific ingredients.
Interest Rates We centrally manage our debt and cash equivalents, considering investment opportunities and risks, tax consequences and overall financing strategies. Our cash equivalents consist primarily of money market funds or their equivalent. As of June 30, 2023, we had $830 million of variable rate debt outstanding under our Credit Agreement.
Interest Rates We centrally manage our debt and cash equivalents, considering investment opportunities and risks, tax consequences and overall financing strategies. Our cash equivalents consist primarily of money market funds or their equivalent. As of June 30, 2024, we had $746 million of variable rate debt outstanding under our Credit Agreement.
Assuming current cash equivalents, variable rate borrowings and the effects of the interest rate swaps, a hypothetical change in average interest rates of one percentage point would have resulted in higher net interest expense of $5.5 million.
Assuming current cash equivalents, variable rate borrowings and the effects of the interest rate swaps, a hypothetical change in average interest rates of one percentage point would have resulted in higher net interest expense of $4.1 million.
Amounts invested in our non-United States subsidiaries are translated into United States Dollars at the exchange rates as of the last day of each reporting period. Any resulting cumulative translation adjustments are recorded in Stockholders’ Equity as Accumulated Other Comprehensive Loss.
Fluctuations in currency exchange rates may also impact the Stockholders’ Equity of the Company. Amounts invested in our non-U.S. subsidiaries are translated into United States Dollars at the exchange rates as of the last day of each reporting period. Any resulting cumulative translation adjustments are recorded in Stockholders’ Equity as Accumulated Other Comprehensive Loss.
The cumulative translation adjustments component of Accumulated Other Comprehensive Loss decreased by $30.2 million during the fiscal year ended June 30, 2023. To reduce that risk, the Company ma y enter into certain derivative financial instruments, when available on a cost-effective basis, to manage such risk.
The cumulative translation adjustments component of Accumulated Other Comprehensive Loss decreased by $9.0 million during the fiscal year ended June 30, 2024. To manage that risk, the Company may enter into certain derivative financial instruments, when available on a cost-effective basis. We had approximately $131.8 million in notional amounts of cross-currency swaps at June 30, 2024.
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 June 30, 2023, the notional amount of the interest rate swaps was $400 million with fixed rate payments of 5.10% that started from February 2023.
We use interest rate swaps to hedge a portion of the interest rate risk related to our outstanding variable rate debt. As of June 30, 2024, the notional amount of the interest rate swaps was $400 million with fixed rate payments of 5.60%.
We had approximately $131.8 million in notional amounts of cross-currency swaps and foreign currency exchange contracts at June 30, 2023. See Note 16, Derivatives and Hedging Activities , in the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K.
See Note 16, Derivatives and Hedging Activities , in the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K.
Based on our cost of goods sold duri ng the fiscal year ended June 30, 2023, such a change would have resulted in an increase or decrease to cost of sales of approximately $106 million.
Based on our cost of goods sold during the fiscal year ended June 30, 2024, such a change would have resulted in an increase or decrease to cost of sales of approximately $110 million. We attempt to offset the impact of input cost increases with a combination of cost savings initiatives and efficiencies and price increases. 40 Table of Contents
During fiscal 2023, approximately 43% of our consolidated net sales were generated from sales outside the United States, while such sales outside the United States were 45% of net sales in fiscal 2022 and 52% of net sales in fiscal 2021.
During fiscal 2024, approximately 46% of our consolidated net sales were generated from sales outside the U.S., while such sales outside the U.S. were 43% of net sales in fiscal 2023 and 45% of net sales in fiscal 2022. These revenues, along with related expenses and capital purchases, were conducted primarily in British Pounds Sterling, Euros and Canadian Dollars.
Removed
These revenues, along with related expenses and capital purchases, were conducted primar ily in British Pounds Sterling, Euros and Canadian Dollars. Sales and operating income would have decreased by approximatel y $39.4 million and $2.8 million, resp ectiv ely, if average foreign exchange rates had been lower by 5% against the U.S. Dollar in fiscal 2023.
Removed
W e attempt to offset the impact of input cost increases with a combination of cost savings initiatives and efficiencies and price increases. 40 Table of Contents

Other HAIN 10-K year-over-year comparisons