HAIN CELESTIAL GROUP INC

The Hain Celestial Group, Inc. operates in the global health and wellness industry, offering better-for-you brands across beverages, yogurt, baby/kids, and meal preparation. The company's products are marketed and sold worldwide, with a customer base consisting principally of supermarkets, natural food stores, mass-market, club stores, specialty and natural food distributors, e-commerce retailers, and away from home channels. The industry is highly competitive, with competition based on product quality, brand recognition, brand loyalty, price, product innovation, packaging, and promotional activity. The company faces competition from both large conventional packaged goods companies and natural and organic packaged foods companies, as well as regional and local niche brands, and retailers' private label products.

The company's leading brands include Celestial Seasonings teas, The Greek Gods yogurt, Earth's Best Organic and Ella's Kitchen baby and kids foods, Joya and Natumi plant-based beverages, Hartley's jelly, and Cully & Sully, Yorkshire Provender, and New Covent Garden soups. Walmart Inc. and its affiliates together accounted for approximately 13% ¹ and 18% ² of consolidated net sales for the fiscal years ended June 30, 2026 and 2025, respectively. No other customer accounted for at least 10% of net sales in any of the past two fiscal years. The company believes that its trademarks are significant to the marketing and sale of its products, and it generally registers its trademarks and brand names in the U.S., Canada, the European Union, the United Kingdom, and/or other foreign countries.

The company generates revenue through the sale of branded and private label products across two geographic reportable segments: North America and International. Products are sold through a combination of direct salespeople, brokers, and independent distributors. The company's measure of segment profitability is Adjusted EBITDA, and the CODM also uses net sales to analyze segment results and trends. A significant portion of products are sold through independent distributors who purchase products for resale to retailers. The company also partners with contract manufacturers to produce many of its products, with approximately 47% ³ and 36% ⁴ of sales derived from products manufactured by co-packers in fiscal 2026 and 2025, respectively.

The North America segment includes the United States and Canada. In the U.S., brands include The Greek Gods yogurt, Celestial Seasonings teas, Earth's Best baby and kid foods, Spectrum and Spectrum Essentials pantry products, MaraNatha nut butters, Imagine broths, and personal care products under Alba Botanica, Avalon Organics, and JASON brands. In Canada, brands include The Greek Gods, Celestial Seasonings, Imagine soups, Earth's Best infant formula, MaraNatha nut butters, Spectrum oils, Robertson's marmalades, and personal care products under Alba Botanica, Avalon Organics, JASON, and Live Clean brands. During fiscal 2026, the company completed the closure of the Yves Veggie Cuisine refrigerated and frozen meat-alternative snacks and meals business and sold associated intellectual property.

The International segment includes the United Kingdom and Western Europe. In the U.K., products include Ella's Kitchen baby and toddler foods, New Covent Garden Soup Co., Yorkshire Provender, Cully and Sully chilled soups, private label and Farmhouse Fare hot-eat desserts, Linda McCartney's (under license) frozen plant-based dishes, Hartley's jams and jellies, Sun-Pat nut butters, Clarks natural sweeteners, and Robertson's, Frank Cooper's, and Rose's (under license) marmalades. In Western Europe, products are sold under the Joya, Lima, and Natumi brands, including plant-based beverages, yogurts, desserts, and creamers, as well as Hartley's jams, Celestial Seasonings teas, Linda McCartney's (under license) frozen plant-based dishes, Cully & Sully chilled soups, Happy Rice drink, and private label products.

During the fourth quarter of fiscal year 2025, the company announced that its Board of Directors was conducting a comprehensive review of the company's portfolio. On February 27, 2026, the company completed the sale of its North American Snacks business, including Garden Veggie Snacks, Terra chips, and Garden of Eatin' snacks, and received $111.2 million ⁵ in cash, reflecting the total purchase price of $115.0 million ⁶ less the holdback of an estimate for a customary inventory adjustment. The company used the net proceeds of $101.1 million ⁷ from the North American Snacks Transaction to reduce indebtedness. On September 12, 2026, the company entered into a Share Purchase Agreement with entities affiliated with global private equity firm AURELIUS to sell its International business for a gross sale price of £233.0 million ⁸, plus an additional locked box ticker amount expected to be approximately £5.5 million ⁹, for an estimated aggregate gross sale price of £238.5 million ¹⁰, or approximately $323.2 million ¹¹. The aggregate net cash proceeds are expected to be between £225.1 million ¹² and £228.8 million ¹³, or between approximately $305.0 million ¹⁴ and $310.0 million ¹⁵.

In fiscal 2026, the company recorded aggregate non-cash goodwill impairment charges of $38.5 million ¹⁶ within its North America segment and $154.7 million ¹⁷ within its International segment. As of June 30, 2026, the company had goodwill of $246.1 million ¹⁸ and trademarks and other intangibles assets of $173.5 million ¹⁹, which in the aggregate represented 38.5% ²⁰ of total consolidated assets. Sales outside of the U.S. represented approximately 53% ²¹ and 50% ²² of consolidated net sales in fiscal 2026 and 2025, respectively. The company had approximately 1,800 ²³ employees as of June 30, 2026, with 26% ²⁴ located in North America and 74% ²⁵ located outside of North America.

The company's credit agreement matures in December 2026. Management has been in active engagement with its lenders and other third parties to assess opportunities to refinance the company's debt, extend the maturity under the credit agreement, and evaluate potential capital raising or other strategic transactions. The company does not currently expect to have the ability to repay the principal amount of its credit agreement in full upon maturity if it is unable to successfully extend the maturity or refinance the credit agreement. The company's Board of Directors believes that extending the maturity date and completing the International Business Transaction would be in the best interests of the company and its stakeholders.

The pending sale of the International Business is a major growth vector, with the transaction expected to close in the company's fiscal second quarter ending December 31, 2026, subject to closing conditions. The gross sale price is £233.0 million ²⁶, plus an additional locked box ticker amount expected to be approximately £5.5 million ²⁷, for an estimated aggregate gross sale price of £238.5 million ²⁸, or approximately $323.2 million ²⁹. The aggregate net cash proceeds are expected to be between £225.1 million ³⁰ and £228.8 million ³¹, or between approximately $305.0 million ³² and $310.0 million ³³. Upon closing, the company would use the net proceeds to reduce its indebtedness. The closing conditions include customary regulatory consents from authorities in the United Kingdom, Austria, Ireland, Germany, and Belgium, and by October 12, 2026, the company and its lenders entering into an amendment of the credit agreement to extend the maturity date by not less than nine months.

The company's strategy includes a focus on innovation and new product development, with research and development staff routinely reformulating and improving existing products. The company partners with contract manufacturers to quickly and economically introduce new products to market. The company also partners with certain customers from time to time on exclusive customer initiatives. The company aims to meet the consumer at multiple points in their journey across the digital and omni channel ecosystem, using a combination of trade and consumer advertising and promotion, including paid social and digital advertising, retailer media, and public relations programs.

The company faces input cost inflation, including as a result of tariffs, which may adversely affect future results. The company seeks to offset increased input costs with a combination of price increases to customers, purchasing strategies, cost savings initiatives, and operating efficiencies. However, the company may be unable to fully offset increased costs or unable to do so in a timely manner. Increases in pricing resulting from input cost inflation may impact volume of products sold and could adversely affect financial results.

The company's supply chain is subject to risks including disruptions, reliance on independent contract manufacturers, and the availability and pricing of raw materials. Approximately 47% ³⁴ of sales in fiscal 2026 were derived from products manufactured by co-packers. The company operates manufacturing facilities in Boulder, Colorado; Mississauga, Ontario; Histon, England; Grimsby, England; Clitheroe, England; Fakenham, England; Troisdorf, Germany; Oberwart, Austria; and Schwerin, Germany. The company maintains business continuity and disaster recovery plans to prepare for potential information technology disruptions.

The company's capital allocation priorities include reducing indebtedness. The company used the net proceeds of $101.1 million ³⁵ from the North American Snacks Transaction to reduce indebtedness, and upon closing of the International Business Transaction, the company would use the net proceeds to reduce its indebtedness. The company's credit agreement contains covenants imposing restrictions on its business, including limitations on its ability to pay dividends or make other distributions, incur debt and liens, and make certain investments, acquisitions, and loans.

The company faces significant headwinds including the risk of default under its credit agreement, which matures in December 2026. If the company is unable to extend the maturity or refinance the credit agreement, it does not currently expect to have the ability to repay the principal amount in full upon maturity, which could result in the lenders having a claim against the company for the unpaid principal amount, together with accrued and unpaid interest. The company's common stock has failed to comply with Nasdaq's minimum bid price requirement, and the company is evaluating actions to resolve the deficiency, including by effecting a reverse stock split.

The company faces execution risks related to the divestiture of its International Business, including challenges and uncertainty in managing the remaining business while the sale is pending and following the sale if completed. Management will need to focus simultaneously on managing the remaining business, addressing indebtedness, and completing the sale. The company may face challenges in attracting, retaining, and motivating key management and other employees, and retaining existing business and operational relationships. The price of the company's common stock may experience further volatility as a result of this uncertainty.

The company faces material risks related to its indebtedness, as its credit agreement matures in December 2026, and if the company is unable to extend the maturity or refinance, it does not currently expect to have the ability to repay the principal amount in full, which could result in lenders having a claim against the company for the unpaid principal amount, together with accrued and unpaid interest ³⁶. The company's obligations under the credit agreement are guaranteed by certain domestic subsidiaries and secured by liens on assets, including equity interests in direct subsidiaries and intellectual property, giving lenders a senior claim to a material portion of assets ³⁷. The company recorded significant non-cash goodwill impairment charges of $38.5 million ³⁸ in North America and $154.7 million ³⁹ in International during fiscal 2026, and as of June 30, 2026, goodwill and trademarks and other intangibles represented 38.5% ⁴⁰ of total consolidated assets, exposing the company to further impairment risk. The company's common stock has failed to comply with Nasdaq's minimum bid price requirement, and if delisted, could further depress the stock price and reduce liquidity ⁴¹. The company is subject to consumer class actions and other lawsuits alleging personal injury relating to its Earth's Best baby food products, which could result in significant costs and damages ⁴².

Management's message emphasizes the company's strategic review of its portfolio to maximize shareholder value, which has resulted in the sale of the North American Snacks business and the pending sale of the International Business. The company's purpose is to inspire healthier living for people, communities, and the planet through better-for-you brands. Management has emphasized the importance of extending the maturity date of the credit agreement and completing the International Business Transaction, which the Board of Directors believes would be in the best interests of the company and its stakeholders. The company's strategy focuses on innovation, new product development, and meeting consumers across the digital and omni channel ecosystem. Management has also highlighted the company's commitment to its Impact strategy, focusing on environmentally sound business practices, creating and selling better-for-you products, stakeholder and community impact initiatives, and sustainable manufacturing processes.