UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________________________ FORM 10-Q ___________________________________________ (Mark One) ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended December 31, 2022 or Table of Contents ☐ Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to Commission File No. 0-22818 __________________ ...

The Hain Celestial Group, Inc. (NASDAQ:HAIN) Q2 2023 Earnings Conference Call February 7, 2023 8:30 AM ET Company Participants Chris Mandeville – Managing Director-ICR Wendy Davidson – President and Chief Executive Officer Chris Bellairs – Executive Vice President and Chief Financial Officer Conference Call Participants Andrew Lazar – Barclays Matt Smith – Stifel Ken Goldman – JPMorgan Alexia Howard – Bernstein David Palmer – Evercore ISI Brian Holland – Cowen and Company Michael Lavery – Piper Sandler Rob ...

4 Q2 FY23 Adj. EBITDA 21.5% 19.4% 22.9% Note(s): Adjusted Gross Margin, Adjusted EBITDA and Adjusted EBITDA at constant currency are non-GAAP financial measures. See Appendix for reconciliation between non-GAAP and comparable GAAP financial measures. Adjusted EBITDA on a constant currency basis: Current period adjusted EBITDA for entities reporting in currencies other than USD are translated into USD at the average monthly exchange rates in effect during the corresponding period of the prior fiscal year, ra ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________________________ FORM 10-Q ___________________________________________ (Mark One) ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2022 or ☐ Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to Commission File No. 0-22818 _________________ ...

The Hain Celestial Group, Inc. (NASDAQ:HAIN) Q1 2023 Earnings Conference Call November 8, 2022 8:30 AM ET Company Participants Chris Mandeville - Managing Director-Investor Relations, ICR Mark Schiller - President & Chief Executive Officer Chris Bellairs - Executive Vice President & Chief Financial Officer Conference Call Participants Brian Holland - Cowen Andrew Lazar - Barclays Alexia Howard - Bernstein David Palmer - Evercore ISI Michael Lavery - Piper Sandler Ken Goldman - JPMorgan Rob Dickerson - Jeffe ...

First Quarter Fiscal Year 2023 Earnings Call November 8, 2022 Forward-Looking Statements This presentation contains forward-looking statements within the meaning of safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, our results may differ materially from those expressed or implied by such forward-looking statements. The words "believe," ...

Sales Performance - Turbocharge brands accounted for approximately 39% of consolidated net sales in fiscal 2022, up from 32% in fiscal 2020[44] - North America segment net sales were $1,163,132 thousand in fiscal 2022, representing 61% of total net sales[45] - International segment net sales were $728,661 thousand in fiscal 2022, representing 39% of total net sales[45] - Sales outside the United States represented approximately 45% of consolidated net sales in fiscal 2022, down from 52% in fiscal 2021[57] - Walmart Inc. accounted for approximately 15% of consolidated sales in fiscal 2022, up from 12% in fiscal 2020[56] - Targeted Investment brands accounted for approximately 35% of consolidated net sales in fiscal 2022, up from 32% in fiscal 2020[44] - Simplify brands accounted for approximately 5% of consolidated net sales in fiscal 2022, down from 17% in fiscal 2020[44] Manufacturing and Supply Chain - Approximately 51% of revenue in fiscal 2022 was derived from products manufactured at the company's own facilities[62] - Approximately 49% of sales in fiscal 2022 were derived from products manufactured by co-packers[65] - The company maintains long-term relationships with suppliers, with purchase arrangements generally made annually[68] - The company conducts audits of contract manufacturers to ensure compliance with food safety standards and specifications[78] Cost and Inflation - The company experienced significant input cost increases starting in the latter part of fiscal 2021, continuing through fiscal 2022, and expects this inflationary environment to persist throughout fiscal 2023[69] - A hypothetical 10% increase in the weighted average cost of primary inputs would have resulted in an increase to cost of sales of approximately $101 million based on fiscal year 2022 cost of goods sold[263] Foreign Exchange and Debt - A hypothetical 5% decrease in average foreign exchange rates would have led to a decrease in sales and operating income by approximately $42.3 million and $4.2 million, respectively, in fiscal 2022[260] - The company had $889 million of variable rate debt outstanding as of June 30, 2022, with interest rate swaps covering a notional amount of $630 million[258] - The company has approximately $131.8 million in notional amounts of cross-currency swaps and foreign currency exchange contracts as of June 30, 2022[262] Product Safety and Quality - The company utilizes a comprehensive product safety and quality management program, ensuring compliance with various regulations and standards[76] - The cumulative translation adjustments component of Accumulated Other Comprehensive Loss decreased by $102.1 million during the fiscal year ended June 30, 2022[261]

Financial Data and Key Metrics Changes - Consolidated net sales increased by 1.4% year-over-year to $457 million, with foreign exchange reducing reported net sales by approximately 440 basis points [33] - Adjusted gross margin was 19.4% in Q4, approximately 630 basis points lower than the prior year period [35] - Adjusted EBITDA in Q4 was $35.4 million, down from $68.1 million in the prior year [37] Business Line Data and Key Metrics Changes - North American sales grew by 17% overall compared to the same period in 2021, with adjusted net sales increasing about 6% [12][38] - Growth brands in North America delivered adjusted net sales growth of more than 8% in Q4, with significant momentum in the second half of the year [39] - International sales were down 19% in Q4, driven by softness in the plant-based non-dairy beverage category and lost co-manufacturing contracts [42][44] Market Data and Key Metrics Changes - In the UK, adjusted net sales declined by 0.9%, but this was a 60 basis point sequential improvement versus Q3 [42] - The plant-based beverage category in Europe saw a significant deceleration in growth, impacting sales expectations [44] - Inflation in North America is expected to be mid-teens, driven by high prices for vegetables and oils, particularly due to the Ukraine conflict [86] Company Strategy and Development Direction - The company is transitioning from Hain 2.0, focused on cost-cutting, to Hain 3.0, which emphasizes higher growth through distribution and innovation [27][62] - The company plans to continue simplifying its portfolio while building capabilities and reducing costs, aiming for consistent stable growth [28] - Pricing actions have been taken to offset inflation, with 90% of planned increases already communicated and accepted by retail partners [80][53] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a difficult business environment due to COVID challenges, high inflation, and supply chain disruptions [8] - There is cautious optimism regarding the macro environment, with early signs of improvement in inflation and consumer behavior [31] - The company expects low single-digit top-line growth in fiscal '23, with more significant growth anticipated in the second half of the year [26][57] Other Important Information - Operating cash flow was negative $19 million in Q4, with a full-year operating cash flow of $80 million [47] - The company repurchased 0.5 million shares at an average price of $26.13 per share, totaling approximately $13 million [50] - The leverage ratio was 3.9x as of June 30, 2022, near the top end of the stated range [60] Q&A Session Summary Question: Why was the guidance range widened for fiscal '23? - Management indicated that the widening of the range reflects the volatile environment in Europe and the challenges in forecasting [71] Question: What is the outlook for plant-based products in Europe? - Management noted that the plant-based beverage category has seen a decline, but they remain confident in the long-term trajectory of the category [73] Question: What is the company's approach to pricing in fiscal '23? - Management clarified that they are covering visible inflation with pricing and are prepared to take further pricing actions if necessary [80] Question: How is the company addressing supply chain issues? - Management stated that most supply chain disruptions are expected to be resolved by the end of Q1, with a focus on improving productivity [93] Question: What are the expectations for marketing spend in fiscal '23? - Management indicated that marketing investments will be modest due to inflation pressures, but they remain committed to supporting brand growth [89] Question: What is the company's strategy regarding plant-based capacity expansion? - Management confirmed that they are not expanding capacity in plant-based products at this time, pending a clearer outlook for the category [92]

Financial Performance - Q4 2022 - Net sales decreased by 4% year-over-year[4] - Adjusted net sales decreased by 04% year-over-year, compared to approximately flat guidance[4] - Adjusted gross margin decreased by 280 basis points[4] - Adjusted EBITDA decreased by 23%, compared to low double-digit decline guidance[4] Financial Performance - Full Year 2022 - Net sales increased by 1% year-over-year[4] - Adjusted net sales decreased by 1% year-over-year, compared to low to mid-single digit growth guidance[4] - Adjusted gross margin decreased by 630 basis points[4] - Adjusted EBITDA decreased by 48%, compared to low to mid-single digit decline guidance[4] Segment Performance - North America net sales increased by 6% year-over-year[5] - International net sales decreased by 9% year-over-year[5] FY2023 Guidance - Adjusted net sales are expected to grow between -1% to +4%[19] - Adjusted EBITDA on a constant currency basis is expected to grow between -1% to +4%[19]

Part I - Financial Information [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements, including balance sheets, income statements, cash flows, and detailed notes [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) Balance Sheet (in thousands USD) | Financial Metric | March 31, 2022 (in thousands USD) | June 30, 2021 (in thousands USD) | | :--- | :--- | :--- | | **Balance Sheet** | | | | Total Current Assets | $559,591 | $577,055 | | Total Assets | $2,441,480 | $2,205,908 | | Total Current Liabilities | $282,654 | $290,434 | | Total Liabilities | $1,297,436 | $683,025 | | Total Stockholders' Equity | $1,144,044 | $1,522,883 | Income Statement (in thousands USD) | Financial Metric | Three Months Ended Mar 31, 2022 (in thousands USD) | Nine Months Ended Mar 31, 2022 (in thousands USD) | | :--- | :--- | :--- | | **Income Statement** | | | | Net Sales | $502,939 | $1,434,783 | | Gross Profit | $115,703 | $338,416 | | Operating Income | $35,164 | $92,732 | | Net Income | $24,531 | $74,831 | | Diluted EPS | $0.27 | $0.79 | Cash Flow (in thousands USD) | Cash Flow Activity | Nine Months Ended Mar 31, 2022 (in thousands USD) | Nine Months Ended Mar 31, 2021 (in thousands USD) | | :--- | :--- | :--- | | Net cash provided by operating activities | $99,186 | $146,517 | | Net cash used in investing activities | ($284,271) | ($25,968) | | Net cash provided by (used in) financing activities | $172,858 | ($110,956) | | Net (decrease) increase in cash | ($18,063) | $15,243 | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) - On December 28, 2021, the Company acquired That's How We Roll (THWR) for cash consideration of **$260.9 million**, strengthening its position in the snacking category[31](index=31&type=chunk)[44](index=44&type=chunk) - The company completed several divestitures, including its North America non-dairy beverages business for **$31.3 million** on April 15, 2021, and its Fruit business on January 13, 2021[50](index=50&type=chunk)[51](index=51&type=chunk) - On December 22, 2021, the Company refinanced its credit facility with a new **$1.1 billion** senior secured financing agreement, comprising a **$300 million** term loan and an **$800 million** revolving credit facility, both maturing in December 2026[69](index=69&type=chunk) - The company is involved in significant litigation, including securities class actions and numerous lawsuits alleging unsafe levels of naturally occurring heavy metals in its Earth's Best baby food products[123](index=123&type=chunk)[130](index=130&type=chunk) Segment Performance (in thousands USD) | Segment | Net Sales (3mo ended 3/31/22, in thousands USD) | Operating Income (3mo ended 3/31/22, in thousands USD) | | :--- | :--- | :--- | | North America | $325,742 | $28,526 | | International | $177,197 | $18,303 | | Segment | Net Sales (9mo ended 3/31/22, in thousands USD) | Operating Income (9mo ended 3/31/22, in thousands USD) | | :--- | :--- | :--- | | North America | $866,281 | $72,530 | | International | $568,502 | $69,740 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, strategic initiatives, and market conditions, including the 'Hain 3.0' strategy and THWR acquisition [Overview and Strategy](index=39&type=section&id=Overview%20and%20Strategy) - The company is executing its 'Hain 3.0' strategy to build a global healthy food and beverage company by re-segmenting its brand portfolio into 'Turbocharge', 'Targeted Investment', and 'Fuel' categories[146](index=146&type=chunk)[147](index=147&type=chunk) - Operational challenges from the COVID-19 pandemic, including supply chain issues and labor shortages, have been exacerbated by the Russia-Ukraine war, increasing fuel, raw material, and labor costs[150](index=150&type=chunk) - The acquisition of THWR (ParmCrisps® and Thinsters®) on December 28, 2021, is a key step in strengthening the company's snacking category position and advancing its high-growth strategy[151](index=151&type=chunk) [Results of Operations](index=41&type=section&id=Results%20of%20Operations) Quarterly Financial Performance (Millions USD) | Metric | Q3 FY22 (Millions USD) | Q3 FY21 (Millions USD) | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $502.9M | $492.6M | +2.1% | | Gross Profit | $115.7M | $129.9M | -10.9% | | Operating Income | $35.2M | $49.6M | -29.1% | | Net Income | $24.5M | $34.3M | -28.4% | | Diluted EPS | $0.27 | $0.34 | -20.6% | - For Q3 FY22, North America net sales grew **13.3%** to **$325.7 million**, driven by the THWR acquisition and stronger sales in snacks, baby, and personal care, though operating income fell **27.8%** to **$28.5 million** due to inflation and supply chain costs[168](index=168&type=chunk)[169](index=169&type=chunk) - For Q3 FY22, International net sales decreased **13.6%** to **$177.2 million**, impacted by foreign exchange, divestitures, and lower sales in Europe and the UK, with operating income declining **31.6%** to **$18.3 million** due to lower sales and higher costs[168](index=168&type=chunk)[170](index=170&type=chunk) Nine-Month Financial Performance (Millions USD) | Metric | 9 Months FY22 (Millions USD) | 9 Months FY21 (Millions USD) | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,434.8M | $1,519.6M | -5.6% | | Gross Profit | $338.4M | $379.0M | -10.7% | | Operating Income | $92.7M | $65.8M | +42.1% | | Net Income | $74.8M | $36.9M | +102.9% | | Diluted EPS | $0.79 | $0.36 | +119.4% | - The significant increase in operating income for the nine-month period was primarily due to a **$57.7 million** impairment charge related to the UK fruit business in the prior year period, which was not repeated[180](index=180&type=chunk)[181](index=181&type=chunk) [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) - The company refinanced its debt on December 22, 2021, with a new **$1.1 billion** Credit Agreement, including a **$300 million** term loan and an **$800 million** revolver, maturing in December 2026[199](index=199&type=chunk) Key Financial Position Metrics (Millions USD) | Metric | March 31, 2022 (Millions USD) | June 30, 2021 (Millions USD) | | :--- | :--- | :--- | | Cash and cash equivalents | $57.8M | $75.9M | | Total Debt | $835.5M | $231.0M | | Working Capital | $273.6M | $284.7M | - Cash from operations for the nine months ended March 31, 2022, was **$99.2 million**, a decrease from **$146.5 million** in the prior year, primarily due to lower net income (adjusted for non-cash items) and a prior-year CARES Act refund[203](index=203&type=chunk) - During the nine months ended March 31, 2022, the company repurchased **10.1 million shares** for **$395.8 million**, with **$186.6 million** remaining under the share repurchase authorization as of March 31, 2022[207](index=207&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=54&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No significant changes in market risk exposures from those disclosed in the prior fiscal year's Annual Report on Form 10-K - There have been no significant changes in market risk from those addressed in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2021[226](index=226&type=chunk) [Item 4. Controls and Procedures](index=55&type=section&id=Item%204.%20Controls%20and%20Procedures) CEO and CFO concluded disclosure controls were effective, excluding the recently acquired THWR business from evaluation - The CEO and CFO concluded that disclosure controls and procedures were effective as of March 31, 2022[227](index=227&type=chunk) - The assessment of internal controls over financial reporting for the recently acquired THWR business was omitted from the evaluation, as permitted by SEC guidance, as THWR was acquired on December 28, 2021[227](index=227&type=chunk)[229](index=229&type=chunk) Part II - Other Information [Item 1. Legal Proceedings](index=56&type=section&id=Item%201.%20Legal%20Proceedings) Details ongoing legal matters, including securities class actions and lawsuits regarding heavy metals in baby food products - The company is subject to ongoing legal proceedings, including securities class actions and stockholder derivative complaints filed in federal court[123](index=123&type=chunk)[124](index=124&type=chunk) - Since February 2021, the company has faced numerous consumer class actions (**29 active lawsuits**) and personal injury lawsuits alleging its Earth's Best baby food contains unsafe levels of heavy metals, which the company denies[130](index=130&type=chunk)[133](index=133&type=chunk) [Item 1A. Risk Factors](index=56&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors previously disclosed in the Annual Report on Form 10-K for the prior fiscal year - There have been no material changes from the risk factors discussed in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2021[233](index=233&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=56&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details common stock repurchases, with **3.6 million shares** bought for **$130.4 million** in Q1 2022 Common Stock Repurchases | Period (2022) | Total Shares Purchased | Average Price Paid per Share (USD) | | :--- | :--- | :--- | | January | 2,332,093 | $37.80 | | February | 425,086 | $36.46 | | March | 857,340 | $33.07 | | **Total Q1 2022** | **3,614,519** | **$36.52** | - As of March 31, 2022, the Company had **$186.6 million** of remaining authorization under its share repurchase program, following authorizations in June 2017, August 2021, and January 2022[235](index=235&type=chunk) [Item 5. Other Information](index=56&type=section&id=Item%205.%20Other%20Information) Announced leadership restructuring on May 3, 2022, eliminating the Chief Commercial Officer position and resulting in a departure - On May 3, 2022, the Board of Directors eliminated the position of Executive Vice President and Chief Commercial Officer[236](index=236&type=chunk) - Christopher J. Boever, the Chief Commercial Officer, left the company effective May 6, 2022, as a result of the restructuring[236](index=236&type=chunk) [Item 6. Exhibits](index=57&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with the Form 10-Q, including corporate documents, executive letters, and SEC-required certifications