Quarterly Report for Quarter Ending December 31, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

This Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Consolidated Financial Statements and the related Notes thereto for the period ended December 31, 2025 contained in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended June 30, 2025. Forward-looking statements in this Form 10-Q are qualified by the cautionary statement included in this Form 10-Q under the heading "Forward-Looking Statements" in the introduction of this Form 10-Q.

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. 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 and meal preparation are marketed and sold in over 70 countries around the world. The Company operates under two reportable segments: North America and International.

The Company's leading brands include Garden Veggie Snacks™, Terra®chips, Garden of Eatin'®snacks, Hartley's®jelly, Earth's Best®Organic and Ella's Kitchen®baby and kid's foods, Celestial Seasonings®teas, Joya®and Natumi®plant-based beverages, The Greek Gods®yogurt, Cully & Sully®, Yorkshire Provender®, New Covent Garden®and Imagine®soups, among others.

Strategic Review

We are focused on five actions to win in the marketplace and drive growth: aggressively streamlining our portfolio, accelerating brand renovation and innovation, implementing price increases along with broader revenue growth management, driving productivity and working capital efficiency, and enhancing our digital capabilities, inclusive of ecommerce.

During the fourth quarter of fiscal year 2025, we announced that our Board of Directors was conducting a comprehensive review of the Company's portfolio with the assistance of our independent financial advisor.

As part of this review, on January 30, 2026, the Company entered into a definitive agreement to sell its North American Snacks business, including Garden Veggie Snacks™, Terra®chips and Garden of Eatin'®snacks as well as certain private label products (the "North American Snacks Business") for $115,000 in cash, subject to a customary inventory adjustment (the "Transaction"). The Company will use the net proceeds from the Transaction to pay down debt. The Transaction, which is expected to close in February 2026, represents an important first step in the Company's broader strategic review, as it will reduce leverage while enabling the Company to focus on a more concentrated portfolio of core assets to drive growth. See Note 19, Subsequent Event. Further, in the third quarter of fiscal year 2025, we announced that we were exploring strategic alternatives regarding our personal care business to focus on our portfolio of better-for-you food and beverages.

Restructuring Program

During the first quarter of fiscal year 2024, the Company began a multi-year restructuring program (the "Restructuring Program"), to improve profitability and support future growth and incurred charges related to contract terminations, asset write-downs, employee-related costs, and other transformation-related expenses.

Cumulative pretax charges associated with the Restructuring Program are expected to be $115 million - $125 million which represents an increase of $15 million from the previously reported range, primarily due to incremental restructuring actions expected to be incurred in connection with the sale of the North American Snacks Business. The Restructuring Program is expected to conclude by fiscal year 2027. For the three and six months ended December 31, 2025, we incurred pretax charges of $3.8 million and $17.3 million respectively, associated with the Restructuring Program, compared to approximately $7.3 million and $12.7 million respectively, in the corresponding periods of the prior year.

Annualized pretax savings are expected to be $130 million - $150 million. The gross savings to date reflect operating model savings, productivity delivery and benefits from revenue growth management initiatives, offset by volume deleveraging and input cost inflation.

Global Economic Environment

Inflation volatility, shifting consumer behavior, and broader geopolitical tensions have contributed to rising supply chain costs and broader business impacts. Ongoing economic uncertainty, driven by factors such as inflation volatility, evolving fiscal policies, global supply chain constraints, changes in interest rates, and changing U.S. and international trade restrictions and tariffs further heightens industry-wide uncertainty. We continually assess the nature and extent of these potential and evolving impacts on our business, consolidated operational results, liquidity, and capital resources.

Comparison of Three Months Ended December 31, 2025 to Three Months Ended December 31, 2024

Consolidated Results

The following table compares our results of operations, including as a percentage of net sales, on a consolidated basis, for the three months ended December 31, 2025 and 2024 (dollars in thousands, other than per share amounts and percentages, which may not add due to rounding):

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

Net Sales

Net sales for the three months ended December 31, 2025 were $384.1 million, a decrease of $27.4 million, or 6.7%, including an unfavorable impact of $10.2 million, or 2.2%, related to held for sale businesses, discontinued brands and exited product categories and a favorable impact of $9.0 million, or 2.2%, from foreign exchange, as compared to the prior year quarter. The decrease in net sales reflected a decline in the North America reportable segment, partially offset by an increase in net sales in the International reportable segment. Organic net sales, defined as net sales adjusted to exclude the impact of foreign exchange, acquisitions, divestitures, discontinued brands and exited product categories, decreased $26.2 million, or 6.7%, from the prior year quarter. The decrease in organic net sales was due to decline in both the North America and International reportable segments. Additionally, the decrease in organic net sales was comprised of a 9.0% decrease in volume/mix, partially offset by a 2.0% increase in price. Further details of changes in net sales by segment are provided below in the Segment Resultssection.

Gross Profit

Gross profit for the three months ended December 31, 2025 was $74.4 million, a decrease of $19.0 million, or 20.3%, as compared to the prior year quarter. Gross profit margin for the three months ended December 31, 2025 was 19.4% compared with 22.7% in the prior year quarter.

The decrease in gross profit was driven by both the North America and International reportable segments. The decrease in the North America reportable segment was mainly due to lower sales volume, cost inflation and unfavorable fixed cost absorption, partially offset by productivity savings and pricing. International reportable segment gross profit decrease was driven by cost inflation, lower volume/mix and unfavorable fixed cost absorption, partially offset by productivity savings and pricing.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $60.9 million for the three months ended December 31, 2025, a decrease of $9.3 million, or 13.2%, from $70.2 million for the prior year quarter. The decrease was primarily due to lower compensation-related expenses and non-employee-related cost discipline, as the Company continued to implement overhead reduction actions.

Goodwill Impairment

During the three months ended December 31, 2025, the Company recognized aggregate non-cash goodwill impairment charges of $119.9 million related to its U.S. and U.K. reporting units. During the three months ended December 31, 2024, the Company recorded a non-cash goodwill impairment charge of $91.3 million within the North America segment related to its U.S. reporting unit. See Note 9, Goodwill and Intangible Assets, and Note 14, Fair Value Measurements, in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Intangibles and Long-Lived Asset Impairment

During the three months ended December 31, 2025, the Company recorded a non-cash impairment charge of $11.9 million within its International segment related to the Hartley's®jelly indefinite-lived intangible asset. During the three months ended December 31, 2024, the Company recorded a non-cash impairment charge of $15.7 million within its North America segment related to the indefinite and definite lived intangible assets associated with its personal care brands (namely, Avalon Organics®, JASON®, and Live Clean®) and $2.3 million related to an asset group primarily comprised of certain production assets in the North America reportable segment. See Note 9, Goodwill and Intangible Assets, and Note 14, Fair Value Measurements,in the Notes of the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q

Productivity and Transformation Costs

Productivity and transformation costs were $5.2 million for the three months ended December 31, 2025, an increase of $1.0 million, or 24.9%, from $4.2 million in the prior year quarter. The increase was primarily due to higher costs incurred in connection with the Restructuring Program.

Amortization of Acquired Intangible Assets

Amortization of acquired intangibles was $1.2 million for the three months ended December 31, 2025, a decrease of $0.6 million from $1.8 million in the prior year quarter.

Proceeds from Insurance Claim

Proceeds from insurance claim was $25.9 million for the three months ended December 31, 2025 on account of the recognition of a Representation & Warranty ("R&W") insurance receivable related to a prior acquisition.

Operating Loss

Operating loss for the three months ended December 31, 2025 was $98.8 million compared to $91.9 million in the prior year quarter as a result of the items described above.

Interest and Other Financing Expense, Net

Interest and other financing expense, net totaled $15.7 million for the three months ended December 31, 2025, an increase of $2.9 million, or 22.4%, from $12.8 million in the prior year quarter. The increase resulted primarily from a higher interest rate spread as well as increased amortization of deferred financing fees related to the May 2025 and September 2025 amendments to our Credit Agreement, as defined below. See Note 10, Debt and Borrowings, in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Other Income, Net

Other income, net totaled $1.0 million for the three months ended December 31, 2025, a decrease of $3.0 million, or 75.3%, from $4.0 million in the prior year quarter. The decrease was primarily due to a reduction in net foreign exchange gains in the prior year period.

Other income, net for the three months ended December 31, 2025 was primarily comprised of a $1.1 million aggregate pretax gain on the sale of intangible assets and certain property and equipment of the Yves Veggie Cuisine®plant-based business in Canada.

Other income, net for the three months ended December 31, 2024 comprised net foreign exchange gains of $2.4 million and the recognition of a $1.6 million pretax gain on the sale of assets related to the Company's former Bell, CA production facility.

Loss Before Income Taxes and Equity in Net Loss of Equity-Method Investees

Loss before income taxes and equity in net loss of our equity-method investees for the three months ended December 31, 2025 was $113.5 million compared to $100.7 million in the prior year quarter. The increase in the loss before income taxes and equity in net loss of our equity-method investees was due to the items discussed above.

Provision for Income Taxes

The provision for income taxes includes federal, foreign, state and local income taxes. Our income tax expense was $2.4 million for the three months ended December 31, 2025 compared to $2.7 million in the prior year quarter.

The effective income tax rate was an expense of 2.1% and 2.7% for the three months ended December 31, 2025 and 2024, respectively. The income tax expense for the three months ended December 31, 2025 reflected foreign tax expense in certain jurisdictions, recognition of the R&W insurance receivable related to a prior acquisition, impairment of goodwill, and movement in the valuation allowance for both federal and state income taxes. The effective income tax rate for the three months ended December 31, 2024 was impacted by tax expense in certain jurisdictions, impairment of goodwill and personal care intangibles and movement in the valuation allowances for both federal and state income taxes.

Equity in Net Loss of Equity-Method Investees

Equity in net loss from our equity-method investments for the three months ended December 31, 2025 was a loss of $0.1 million compared to $0.6 million in the prior year quarter.

Net Loss

Net loss for the three months ended December 31, 2025 was $116.0 million, or $1.28 per diluted share, compared to $104.0 million, or $1.15 per diluted share, in the prior year quarter. The increase in net loss was attributable to the factors noted above.

Adjusted EBITDA

Adjusted EBITDA was $24.3 million and $37.9 million for the three months ended December 31, 2025 and 2024, respectively, as a result of the factors discussed above. See Reconciliation of Non-U.S. GAAP Financial Measures to U.S. GAAP Measures following the discussion of our results of operations for definitions and a reconciliation of our net loss to Adjusted EBITDA.

Segment Results

The following table provides a summary of net sales and Adjusted EBITDA by reportable segment for the three months ended December 31, 2025 and 2024:

See the Reconciliation of Non-U.S. GAAP Financial Measures to U.S. GAAP Measuresfollowing the discussion of our results of operations and Note 18, Segment Information, in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q for a reconciliation of segment Adjusted EBITDA.

North America

Our net sales in the North America reportable segment for the three months ended December 31, 2025 were $197.8 million, a decrease of $31.5 million, or 13.7%, including an unfavorable impact of $10.2 million, or 3.4%, related to held for sale businesses, discontinued brands and exited product categories, as compared to the prior year quarter. Organic net sales decreased $21.3 million, or 10.3%, to $185.0 million from $206.4 million in the prior year quarter.

The decrease in net sales was primarily due to lower sales in the snacks, meal preparation, and baby & kids categories, partially offset by growth in the beverages category. The decrease in the snacks category was driven by distribution losses and velocity declines. The decline in the meal preparation category was primarily due to lower volume.

The decrease in organic net sales was primarily due to lower sales in the snacks and baby & kids categories, partially offset by growth in the beverages category. The decrease in the baby & kids category was driven by lapping supply recovery from last year. The increase in the beverage category is primarily due to lower trade spend and promotion effectiveness.

Adjusted EBITDA for the three months ended December 31, 2025 was $10.9 million, a decrease of $14.4 million, or 56.9%, from Adjusted EBITDA of $25.3 million in the prior year quarter. The decrease was primarily driven by lower gross margins, partially offset by a reduction in SG&A. The decrease in gross margin was driven by lower volume/mix, cost inflation and unfavorable fixed cost absorption, partially offset by productivity savings and pricing. Adjusted EBITDA margin was 5.5%, a 550-basis point decrease from the prior year period.

International

Our net sales in the International reportable segment for the three months ended December 31, 2025 were $186.3 million, an increase of $4.1 million, or 2.3%, including a favorable impact of $8.9 million, or 4.9%, related to foreign exchange, as compared to the prior year quarter. Organic net sales decreased $4.8 million, or 2.7%, to $176.6 million from $181.4 million the prior year quarter.

The increase in net sales was primarily due to higher sales in the meal preparation and beverages categories, partially offset by decline in baby & kids category. The decrease in organic net sales was primarily due to lower sales in the baby & kids category which was primarily driven by industry-wide volume softness in purees in the U.K.

Adjusted EBITDA for the three months ended December 31, 2025 was $19.0 million, a decrease of $3.5 million, or 15.7%, from Adjusted EBITDA of $22.5 million in the prior year quarter. The decrease was primarily driven by a decrease in gross profit associated with cost inflation, unfavorable fixed cost absorption and lower volume/mix, partially offset by productivity savings and pricing. Adjusted EBITDA margin was 10.2%, a 220-basis point decrease from the prior year period.

Corporate and Other

The decrease in Corporate and Other adjusted EBITDA primarily reflected a reduction in compensation-related expenses.

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

Comparison of Six Months Ended December 31, 2025 to Six Months Ended December 31, 2024

Consolidated Results

The following table compares our results of operations, including as a percentage of net sales, on a consolidated basis, for the six months ended December 31, 2025 and 2024 (amounts in thousands, other than per share data and percentages, which may not add due to rounding):

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

Net Sales

Net sales for the six months ended December 31, 2025 were $752.0 million, a decrease of $54.1 million, or 6.7%, including an unfavorable impact of $23.2 million, or 2.4%, related to held for sale businesses, discontinued brands and exited product categories and a favorable impact of $15.6 million, or 1.9%, from foreign exchange, as compared to the prior year period. The decrease in net sales was due to a decline in the North America reportable segment, partially offset by an increase in the International reportable segment. Organic net sales decreased $46.5 million, or 6.2%, from the prior year period. The decrease in organic net sales was due to decline in both the North America and International reportable segments. Additionally, the decrease in organic net sales was comprised of a 7.9% decrease in volume/mix, partially offset by a 1.7% increase in price. Further details of changes in net sales by segment are provided below in the Segment Resultssection.

Gross Profit

Gross profit for the six months ended December 31, 2025 was $142.5 million, a decrease of $32.5 million, or 18.6%, as compared to the prior year period. Gross profit margin for the six months ended December 31, 2025 was 19.0% compared with 21.7% in the prior year period.

The decrease in gross profit was driven by both the North America and International reportable segments. The decline in the North America reportable segment was due to lower sales volume, partially offset by favorable pricing and trade efficiencies. The International reportable segment had a decrease in gross profit mainly due to cost inflation, partially offset by pricing.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $126.4 million for the six months ended December 31, 2025, a decrease of $15.1 million, or 10.7%, from $141.5 million for the prior year period. The decrease was primarily due to lower compensation-related expenses and non-employee-related cost discipline, as the Company continued implementing overhead reduction actions.

Goodwill Impairment

During the six months ended December 31, 2025, the Company recognized aggregate non-cash goodwill impairment charges of $119.9 million related to its U.S. and U.K. reporting units. During the six months ended December 31, 2024, the Company recorded a non-cash goodwill impairment charge of $91.3 million within the North America segment related to its U.S. reporting unit. See Note 9, Goodwill and Intangible Assets, and Note 14, Fair Value Measurements, in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Intangibles and Long-Lived Asset Impairment

During the six months ended December 31, 2025, the Company recorded a non-cash impairment charge of $11.9 million within its International segment related to the Hartley's®jelly indefinite-lived intangible asset. During the six months ended December 31, 2024, the Company recorded a non-cash impairment charge of $15.7 million within its North America segment related to the indefinite and definite lived intangible assets associated with its personal care brands (namely, Avalon Organics®, JASON®, and Live Clean®) and $2.3 million related to an asset group primarily comprised of certain production assets in the North America reportable segment. See Note 9, Goodwill and Intangible Assets, and Note 14, Fair Value Measurements, in the Notes of the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q

Productivity and Transformation Costs

Productivity and transformation costs were $13.5 million for the six months ended December 31, 2025, a decrease of $4.2 million, or 46.1%, from $9.2 million in the prior year period. The decrease primarily reflected a reduction in restructuring costs incurred in connection with the Restructuring Program.

Amortization of Acquired Intangible Assets

Amortization of acquired intangibles was $2.4 million for the six months ended December 31, 2025, a decrease of $1.5 million, or 38.7%, from $3.9 million in the prior year period.

Proceeds from Insurance Claim

Proceeds from insurance claim was $25.9 million for the six months ended December 31, 2025 on account of a R&W insurance receivable related to a prior acquisition.

Operating Loss

Operating loss for the six months ended December 31, 2025 was $105.7 million compared to $88.8 million in the prior year period as a result of the items described above.

Interest and Other Financing Expense, Net

Interest and other financing expense, net totaled $31.2 million for the six months ended December 31, 2025, an increase of $4.6 million, or 17.4%, from $26.5 million in the prior year period. The increase was primarily driven by a higher interest rate spread as well as increased amortization of deferred financing fees related to the amendment of our credit agreement. See Note 10, Debt and Borrowings, in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Other (Income) Expense, Net

Other income, net totaled $1.7 million for the six months ended December 31, 2025, compared to other expense, net of $1.3 million in the prior year period.

Other income, net for the six months ended December 31, 2025 was primarily comprised of a $1.1 million aggregate pretax gain on the sale of the intangible assets and certain property and equipment of the Yves Veggie Cuisine®plant-based business in Canada.

Other expense, net for the six months ended December 31, 2024 was primarily comprised of pretax loss of $3.9 million on the sale of ParmCrisps®, partially offset by a $1.6 million pretax gain on the sale of assets related to the Company's former Bell, CA production facility and $0.8 million of foreign exchange gains.

Loss Before Income Taxes and Equity in Net Loss of Equity-Method Investees

Loss before income taxes and equity in net loss of our equity-method investees was $135.2 million for the six months ended December 31, 2025, compared to a $116.6 million loss in the prior year period. The increase in the loss before income taxes and equity in net loss of our equity-method investees was due to the items discussed above.

Provision for Income Taxes

The provision for income taxes includes federal, foreign, state and local income taxes. Our income tax expense was $1.1 million for the six months ended December 31, 2025 compared to income tax expense of $6.3 million in the prior year comparable period.

The effective income tax rate was an expense of 0.8% and 5.4% for the six months ended December 31, 2025 and 2024, respectively. The income tax expense for the six months ended December 31, 2025 reflected foreign tax expense in certain jurisdictions, recognition of the R&W insurance receivable related to a prior acquisition, impairment of goodwill, and movement in the valuation allowance for both federal and state income taxes. The effective income tax rate for the six months ended December 31, 2024 was impacted by tax expense in certain jurisdictions, the impairment of goodwill and personal care intangibles and movement in the valuation allowances for both federal and state income taxes.

Equity in Net Loss of Equity-Method Investees

Equity in net loss from our equity-method investments for the six months ended December 31, 2025 was a loss of $0.3 million compared to a loss of $0.7 million in the prior year period.

Net Loss

Net loss for the six months ended December 31, 2025 was $136.6 million, or $1.51 per diluted share, compared to $123.6 million, or $1.37 per diluted share, in the prior year period. The increase in net loss was attributable to the factors noted above.

Adjusted EBITDA

Adjusted EBITDA was $44.0 million and $60.3 million for the six months ended December 31, 2025 and 2024, respectively, as a result of the factors discussed above. See Reconciliation of Non-U.S. GAAP Financial Measures to U.S. GAAP Measures following the discussion of our results of operations for definitions and a reconciliation of our net loss to Adjusted EBITDA.

Segment Results

The following table provides a summary of net sales and Adjusted EBITDA by reportable segment for the six months ended December 31, 2025 and 2024:

See the Reconciliation of Non-U.S. GAAP Financial Measures to U.S. GAAP Measuresfollowing the discussion of our results of operations and Note 18, Segment Information, in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q for a reconciliation of segment Adjusted EBITDA.

North America

Our net sales in the North America reportable segment for the six months ended December 31, 2025 were $401.7 million, a decrease of $58.7 million, or 12.7%, including an unfavorable impact of $22.8 million, or 3.9%, related to held for sale businesses, discontinued brands and exited product categories, as compared to the prior year period. Organic net sales decreased $35.8 million, or 8.8%, to $370.0 million from $405.7 million in the prior year period.

The decrease in net sales was due to lower sales in all categories except for the beverages category, which had higher net sales compared to the prior year period. The decrease in organic net sales was primarily due to lower sales in the snacks and baby & kids categories, partially offset by growth in the beverages category. The decrease in the snacks category was driven by distribution losses and velocity declines, while the baby & kids category net sales decline was primarily driven by volume softness in formula.

Adjusted EBITDA for the six months ended December 31, 2025 was $27.9 million, a decrease of $9.8 million, or 26.1%, from Adjusted EBITDA of $37.8 million in the prior year period. The decrease was primarily driven by lower gross margins, partially offset by a reduction in SG&A. The decrease in gross margin was driven by lower volume/mix, cost inflation and unfavorable fixed cost absorption, partially offset by productivity savings and pricing. Adjusted EBITDA margin was 6.9%, a 130-basis point decrease from the prior year period.

International

Our net sales in the International reportable segment for the six months ended December 31, 2025 were $350.3 million, an increase of $4.6 million, or 1.3%, including a favorable impact of $15.7 million, or 4.5%, related to foreign exchange, as compared to the prior year period. Organic net sales decreased $10.7 million, or 3.1%, to $332.9 million from $343.6 million in the prior year period.

The increase in net sales was primarily due to higher sales in the meal preparation and beverages categories, partially offset by decline in the baby & kids category. The decrease in organic net sales was primarily due to lower sales in the baby & kids and snacks categories, partially offset by growth in the meal preparation category. The decrease in the baby & kids category was primarily driven by industry-wide volume softness in purees in the U.K, while the decline in the snacks category was due to lower volumes.

Adjusted EBITDA for the six months ended December 31, 2025 was $31.6 million, a decrease of $11.3 million, or 26.4%, from Adjusted EBITDA of $42.9 million in the prior year period. The decrease was primarily due to lower gross profit driven by cost inflation, unfavorable fixed cost absorption and lower volume/mix, partially offset by productivity savings and pricing. Adjusted EBITDA margin was 9.0%, a 340-basis point decrease from the prior year period.

Corporate and Other

The decrease in Corporate and Other adjusted EBITDA primarily reflected a reduction in compensation-related expenses.

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

Liquidity and Capital Resources

We finance our operations and growth primarily with the cash flows we generate from our operations and from borrowings available to us under our Credit Agreement (as defined below). We believe that our cash flows from operations and borrowing capacity under our Credit Agreement will be adequate to meet anticipated operating and other expenditures. See Note 2, Basis of Presentation and Note 10, Debt and Borrowings, in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

As of December 31, 2025, we had $705,800 of debt obligations maturing on December 22, 2026, consisting of $454,000 of loans outstanding under the Revolver and $251,800 of Term Loans (each as defined in Note 10, Debt and Borrowings). As of December 31, 2025, we had cash of $68,017 and available liquidity of $143,651, subject to compliance with financial covenants, and the Company was in compliance with all associated covenants under its Credit Agreement (see Note 10, Debt and Borrowings). On January 2, 2026, the Company received $25,900 of proceeds from an insurance claim (see Note 18, Segment Information), which it used to repay loans outstanding under the Revolver, reducing the Company's outstanding debt obligations. See Note 2, Basis of Presentation, in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

As discussed in Note 2, Basis of Presentation, in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q, we announced that our Board of Directors commenced a strategic review of the Company's business and capital structure, in part to evaluate options to improve liquidity and reduce leverage. As part of this review, on January 30, 2026, we entered into a definitive agreement to sell our North American Snacks Business for $115,000, the net proceeds of which will be used to repay a portion of the Term Loans.

The Company and the Board of Directors remain focused on completing the strategic review and taking decisive actions to strengthen the Company's financial flexibility, improve performance and address the upcoming debt maturity under the Credit Agreement. These actions include a continued review of the Company's portfolio and the pursuit of further asset sales to refine the Company's operating model with a focus on categories and platforms in key markets. In addition, we are executing targeted inventory and other working capital optimization initiatives designed to improve the Company's cash conversion and enhance liquidity. We also continue to actively engage with our lenders, assess opportunities to refinance the Company's debt or extend the maturity under the Credit Agreement, and evaluate potential capital raising or other strategic transactions.

We believe that the successful execution of these plans will enable us to refinance and/or retire the existing debt prior to its maturity or extend the maturity date under the Credit Agreement. However, Accounting Standards Codification ("ASC") 205-40, "Presentation of Financial Statements - Going Concern" requires that management not conclude that such an outcome is "probable" if, among other factors, the outcome is not within the control of the Company. Accordingly, there is substantial doubt about the Company's ability to continue as a going concern for at least one year following the date of issuance of these financial statements due to the uncertainty regarding the Company's ability to refinance or repay its debt due on December 22, 2026 because no such refinancing, retirement or extension has occurred prior to the issuance of the financial statements. Our ability to continue as a going concern remains subject to successful execution of our strategic plan and securing additional financing, if needed. If we are unable to execute our plans to generate sufficient liquidity, we may not have adequate resources to repay or refinance our debt, which would have a material adverse effect on our financial position and results of operations.

The consolidated financial statements have been prepared assuming that we will continue as a going concern, and no adjustments have been made to the financial statements to reflect the possibility of our inability to meet our debt obligations or continue as a going concern.

Amended and Restated Credit Agreement

On December 22, 2021, the Company entered into a Fourth Amended and Restated Credit Agreement (as subsequently amended, the "Credit Agreement"). The Credit Agreement originally provided 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 was originally comprised of a $440.0 million U.S. revolving credit facility and $360.0 million global revolving credit facility) (the "Revolver"). Both the Revolver and the Term Loans mature on December 22, 2026. The Company's obligations under the Credit Agreement are guaranteed by certain existing and future domestic subsidiaries of the Company and are secured by liens on assets of the Company and its material domestic subsidiaries, including the equity interest in each of their direct subsidiaries and intellectual property, subject to agreed-upon exceptions.

The Credit Agreement includes financial covenants that require compliance with a consolidated secured leverage ratio, a consolidated leverage ratio and a consolidated interest coverage ratio. On August 22, 2023, the Company entered into a Second Amendment (the "Second Amendment") to the Credit Agreement. 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, 5.00:1.00 until December 31, 2024, and 4.25:1.00 thereafter. See below for a description of the Third Amendment and Fourth Amendment (each as defined below). Following the Fourth Amendment, the Company's maximum consolidated secured leverage ratio under the Credit Agreement was 5.00:1.00 until June 30, 2025 and is 5.50:1.00 for the quarter ending September 30, 2025 and thereafter. Pursuant to the Credit Agreement, the Company's maximum consolidated leverage ratio is 6.00:1.00 and, through June 30, 2025, its minimum interest coverage ratio was 2.50:1.00.

As of September 30, 2025, the Company's consolidated secured leverage ratio, consolidated leverage ratio and consolidated interest coverage ratio were 4.81:1.00, 4.81:1.00 and 2.92:1.00, respectively, and the Company was in compliance with all associated covenants. The aforementioned financial covenants are being reported as calculated under the Credit Agreement and not pursuant to generally accepted accounting principles in the U.S. ("GAAP"). Please refer to the Credit Agreement and amendments filed as exhibits to our periodic reports for further information related to the calculation thereof. For risks related to our indebtedness and compliance with these covenants, please refer to the risk factor "Any default under our credit agreement or inability to refinance our indebtedness could have significant consequences" set forth in Part I, Item 1A, "Risk Factors" of our Form 10-K for the fiscal year ended June 30, 2025.

From the date of the Second Amendment until the date of the Third Amendment, loans under the Credit Agreement bore interest at (a) the Secured Overnight Financing Rate plus a credit spread adjustment of 0.10% ("Term SOFR") plus 2.5% per annum or (b) the Base Rate (as defined in the Credit Agreement) plus 1.5% per annum.

On May 5, 2025, the Company entered into a Third Amendment (the "Third Amendment") to the Credit Agreement. Pursuant to the Third Amendment, the Company's maximum consolidated secured leverage ratio was amended to be 4.75:1.00 for the quarter ending June 30, 2025 through (and including) the quarter ending March 31, 2026, 4.50:1.00 for the quarter ending June 30, 2026, and 4.25:1.00 for the quarter ending September 30, 2026 and thereafter.

Commencing on the date of the Third Amendment, loans under the Credit Agreement bore interest at (a) Term SOFR plus 3.00% per annum or (b) the Base Rate plus 2.00% per annum.

The Third Amendment also reduced the size of the Revolver from $800.0 million to $700.0 million in the aggregate, with the U.S. revolving credit facility reduced from $440.0 million to $385.0 million and the global revolving credit facility reduced from $360.0 million to $315.0 million.

On September 11, 2025, the Company entered into a Fourth Amendment (the "Fourth Amendment") to the Credit Agreement. Pursuant to the Fourth Amendment, (x) the Company's maximum consolidated secured leverage ratio was amended to be 5.00:1.00 for the quarter ending June 30, 2025 and 5.50:1.00 for the quarter ending September 30, 2025 and thereafter, (y) the Company's minimum consolidated interest coverage ratio was amended to be 2.00:1.00 for the quarter ending September 30, 2025 and thereafter and (z) a covenant was added requiring the Company to maintain a minimum Consolidated EBITDA (as such term is defined in the Credit Agreement as amended by the Fourth Amendment) of (i) $17.0 million for the quarter ending September 30, 2025 and (ii) $52.0 million for the cumulative two quarters ending September 30, 2025 and on December 31, 2025. The aforementioned financial covenants use financial measures that are defined under the Credit Agreement and not pursuant to GAAP.

Commencing on the date of the Fourth Amendment, loans under the Credit Agreement bear interest at (a) Term SOFR plus 4.00% per annum or (b) the Base Rate plus 3.00% per annum.

The Fourth Amendment also reduced the size of the Revolver from $700.0 million to $600.0 million in the aggregate, with the U.S. revolving credit facility reduced from $385.0 million to $330.0 million and the global revolving credit facility reduced from $315.0 million to $270.0 million.

Excluding the impact of hedges, the weighted average interest rate on outstanding borrowings under the Credit Agreement at December 31, 2025 was 8.26%. The Company uses interest rate swaps to hedge a portion of the interest rate risk related to its outstanding variable rate debt. As of December 31, 2025, the notional amount of the interest rate swaps was $400,000 with fixed rate payments of 7.12%. Including the impact of hedges, the weighted average interest rate on outstanding borrowings under the Credit Agreement at December 31, 2025 was 7.71%. Additionally, the Credit Agreement contains a commitment fee of 0.25% per annum on the amount unused under the Credit Agreement.

Cash and Cash Equivalents

Our cash and cash equivalents balance increased by $13.6 million at December 31, 2025 to $68.0 million as compared to $54.4 million at June 30, 2025. Our working capital was negative $452.1 million at December 31, 2025, a decrease of $705.1 million from $252.9 million at the end of fiscal 2025. The decrease is driven by the classification of $705.8 million of debt obligations, maturing on December 22, 2026, as current. Additionally, our total debt balance, net of unamortized issuance costs, at December 31, 2025 has remained relatively flat as compared to June 30, 2025.

Our cash balances are held in the U.S., U.K., Canada, Western Europe, the Middle East and India. As of December 31, 2025, 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.

Cash Provided by (Used in) Operating, Investing and Financing Activities

Cash provided by operating activities was $28.5 million for the six months ended December 31, 2025, an increase of $8.4 million from cash provided by operating activities of $20.1 million in the prior year period. This increase in cash provided by operating activities versus the prior year period resulted primarily from a reduction of $8.4 million in net loss adjusted for non-cash charges in the six months ended December 31, 2025. Working capital changes, versus the prior year period, resulted in slightly higher cash generation primarily due to focused inventory management, which generated year- over-year improvement of $28.0 million and an increased benefit from accounts payable and accrued expenses in the amount of $18.6 million, offset by a decrease in accounts receivable and other assets recovery of $18.1 million and $28.5 million, respectively. The decrease in other assets primarily reflected the timing difference associated with the January 2026 collection of $25.9 million of insurance proceeds recognized in the first six months of fiscal 2026.

Cash used in investing activities was $10.4 million for the six months ended December 31, 2025, a change of $14.6 million from cash provided by investing activities of $4.2 million in the prior year period. The change in cash used by investing activities was primarily due to decrease in proceeds from asset sales of $12.0 million, primarily related to the sale of ParmCrisps®, and the receipt of a $2.6 million dividend from Hutchison Hain Organic Holdings Limited, a joint venture with HUTCHMED (China) Limited, each of which were received in the prior year period.

Cash used in financing activities was $3.2 million for the six months ended December 31, 2025, a decrease of $13.8 million compared to $17.1 million in the prior year period. The decrease in cash used in financing activities was primarily due to lower net borrowings during the six months ended December 31, 2025.

Free Cash Flow

Our free cash flow was $16.3 million for the six months ended December 31, 2025, an increase of $8.3 million from free cash flow of $8.0 million in the six months ended December 31, 2024. The period-over-period change resulted primarily from an increase in cash flows from operations of $8.4 million driven by the reasons explained above, partially offset by slightly higher capital expenditures. See Reconciliation of Non-U.S. GAAP Financial Measures to U.S. GAAP Measures following the discussion of our results of operations for definitions and a reconciliation from our net cash provided by operating activities to 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. Repurchases may be made from time to time in the open market, pursuant to pre-set trading plans, in private transactions or otherwise. The current 2022 authorization does not have a stated expiration date. The extent to which the Company repurchases its shares and the timing of such repurchases will depend upon market conditions and other corporate considerations. During the six months ended December 31, 2025, the Company did not repurchase any shares under the repurchase program. As of December 31, 2025, 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. GAAP Measures

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

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

Organic Net Sales

As noted above, we define organic net sales as net sales excluding the impact of acquisitions, divestitures, discontinued brands and exited product categories and foreign exchange. To adjust organic net sales for the impact of acquisitions, the net sales of an acquired business are excluded from fiscal quarters constituting or falling within the current period and prior period where the applicable fiscal quarter in the prior period did not include the acquired business for the entire quarter. To adjust organic net sales for the impact of divestitures, held for sale businesses, discontinued brands and exited product categories, the net sales of a divested business, held for sale business, discontinued brand or exited product category are excluded from all periods. To adjust organic net sales for the impact of foreign exchange, current period net sales for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the average monthly exchange rates in effect during the corresponding period of the prior fiscal year, rather than at the actual average monthly exchange rate in effect during the current period of the current fiscal year.

A reconciliation between reported net sales and organic net sales is as follows:

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), proceeds from insurance claim, certain litigation expenses, net, plant closure related costs, net, productivity and transformation costs, costs associated with acquisitions, divestitures and other transactions, (gain) loss on sale of assets, impairment of goodwill, intangibles and long-lived assets and other adjustments. The Company's management believes that this presentation provides useful information to management, analysts and investors regarding certain additional financial and business trends relating to its results of operations and financial condition. In addition, management uses this measure for reviewing the financial results of the Company and as a component of performance-based executive compensation. Adjusted EBITDA is a non-U.S. GAAP measure and may not be comparable to similarly titled measures reported by other companies.

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

determining Adjusted EBITDA. In order to compensate for these limitations, management presents Adjusted EBITDA in connection with U.S. GAAP results.

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

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 used in or provided by 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 spending). Since capital spending is essential to maintaining our operational capabilities, we believe that it is a recurring and necessary use of cash. As such, we believe investors should also consider capital spending when evaluating our cash flows provided by or used in operating activities. We view 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.

A reconciliation from cash flows provided by operating activities to Free Cash Flow is as follows:

Critical Accounting Estimates

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States. The accounting principles we use require us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and amounts of income and expenses during the reporting periods presented. We believe in the quality and reasonableness of our critical accounting policies; however, materially different amounts may be reported under different conditions or using assumptions different from those that we have applied. The accounting policies that have been identified as critical to our business operations and to understanding the results of our operations pertain to variable consideration, valuation of long-lived assets, goodwill and intangible assets, stock-based compensation and valuation allowances for deferred tax assets. The application of each of these critical accounting policies and estimates is discussed in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the fiscal year ended June 30, 2025, from which there have been no material changes. We are providing the below update regarding goodwill and indefinite-lived intangible assets.

Goodwill

In each quarter subsequent to our annual impairment assessment, we review events that occur or circumstances that change, including the macroeconomic environment, our business performance and our market capitalization, to determine if a quantitative impairment assessment is necessary. If assumptions are not achieved or market conditions decline, potential impairment charges could result. Impairments to goodwill and other intangible assets may be caused by factors outside our control, such as increasing competitive pricing pressures, changes in discount rates based on changes in cost of capital (i.e., as a result of changes in interest rates or other conditions), lower than expected sales and profit growth rates, changes in industry EBITDA multiples, the inability to quickly replace lost co-manufacturing business, or the bankruptcy of a significant customer, among others.

As of December 31, 2025, the Company performed an assessment of factors to determine whether it was more likely than not that the fair value of each reporting unit within both of the North America and International reportable segments was less than its respective carrying amount, including goodwill. As a result of a continued decline in the projected performance and cash flows of the U.S. reporting unit, and in connection with the pending agreement to sell its North American Snacks Business, the Company completed an interim quantitative impairment test of goodwill. As a result of the recognition of an intangible asset impairment charge within the United Kingdom ("U.K.") reporting unit in the International reportable segment and a continued decline in the projected performance and cash flows of the U.K. reporting unit, the Company also completed an interim quantitative impairment test of goodwill. For the Western Europe and Ella's Kitchen UK reporting units, the Company performed a qualitative evaluation to assess factors to determine whether it is more likely than not that the fair value of each reporting unit is less than its carrying amount, including goodwill. The Company concluded that the qualitatively tested reporting units' estimated fair values exceeded their carrying amounts.

In performing the quantitative tests for the U.S. and U.K., the fair values were estimated using the Discounted Cash Flow ("DCF") method income approach as such method was determined to be more representative of future performance from a market participant point of view. As of December 31, 2025, the U.S. reporting unit's carrying amount exceeded its estimated fair value of $459,000, resulting in the recognition of a non-cash impairment charge of $38,495 to reduce the carrying value of the U.S. reporting unit goodwill to $273,826. As of December 31, 2025, the U.K. reporting unit's carrying amount exceeded its estimated fair value of $270,525, resulting in the recognition of a non-cash impairment charge of $81,413 to reduce the carrying value of the U.K. reporting unit goodwill to $32,331. The U.K. reporting unit's impairment charge reflected the sales volume decline that the Company continued to experience. The discount rate in both quantitative tests also reflected an increase in the small stock premium related to a decline in the Company's market capitalization.

The goodwill related to the U.S. and U.K. reporting units remains at risk of potential impairment if the fair value of these reporting units, and their associated assets, decrease in value due to the amount and timing of expected future cash flows, decreased customer demand for products, an inability to execute management's business strategies, or general market conditions, such as economic downturns, and changes in interest rates, including discount rates. Future cash flow estimates are, by their nature, subjective, and actual results may differ materially from the Company's estimates. If the Company's ongoing cash flow projections are not met or if market factors utilized in the impairment test deteriorate, including an unfavorable change in the

terminal growth rate or the weighted-average cost of capital, the Company may have to record additional impairment charges in future periods. We monitor our reporting units at risk of impairment for interim impairment indicators.

As of December 31, 2025, we considered our market capitalization and our net book value and performed a market capitalization reconciliation with the expectation that the market capitalization should reconcile within a reasonable range to the sum of the fair values of the Company's individual reporting units. Upon performing the market capitalization reconciliation, we noted a reasonable reconciliation between the sum of the reporting unit fair values and the Company's market capitalization once adjusted for the impact of corporate costs not allocated to the reporting units. Refer to the critical accounting policies and estimates section included in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the fiscal year ended June 30, 2025.

Indefinite-Lived Intangible Assets

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. In accordance with ASC 350, we may first perform a qualitative assessment to determine whether it is necessary to perform a quantitative impairment test. 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. One procedure we perform during interim periods to determine whether indicators of impairment are present includes a comparison of net sales used in the most recent quantitative impairment tests to forecasted net sales for the same fiscal year (or balance of the fiscal year when performing an interim review) in order to identify brands for which the current fiscal year net sales are expected to be lower than the forecasted fiscal year net sales per the latest quantitative test. The performance of these brands is then reviewed by management to determine if the shortfall to forecasted net sales was related to events and circumstances that are expected to be temporary in nature, or if it were caused by more pervasive issue that could serve as in impairment indicator (e.g., loss of key customers, discontinuance of certain product categories within a brand, etc.). We use this risk-based approach to determine which brands we would quantitatively test for impairment, whether as part of fiscal year annual impairment testing or an interim period test.

During the second quarter of 2026, we qualitatively assessed our indefinite-lived intangible assets for impairment and determined that the Ella's Kitchen®baby and kids foods and Hartley's®jelly indefinite-lived tradenames should be quantitatively tested. The Company's fiscal year 2026 interim impairment testing resulted in the recognition of impairment charges for the Hartley's®jelly indefinite-lived tradename.

During the three months ended December 31, 2025, as a result of a continued decline in net sales driven by industry-wide volume softness for purees within the U.K., the Company conducted an interim quantitative impairment test for its Ella's Kitchen®baby and kids foods indefinite-lived tradename. The Company concluded that the indefinite-lived intangible asset estimated fair value exceeded its carrying amount by 12.8%. The intangible asset is part of the International reportable segment and had a carrying value of $35,801 as of December 31, 2025.

During the three months ended December 31, 2025, as a result of continued decline in net sales, the Company conducted an interim quantitative impairment test for the Hartley's®jelly indefinite-lived tradename. The Company concluded that the indefinite-lived tradename carrying amount exceeded its estimated fair value. During the three months ended December 31, 2025, the Company recorded a non-cash impairment charge of $11,917 which was recorded within intangibles and long-lived asset impairment on the consolidated statement of operations. The Hartley's®jelly indefinite-lived intangible asset is part of the International reportable segment and had a remaining carrying value of $37,685 as of December 31, 2025.

The Ella's Kitchen®baby and kids foods, Hartley's®jelly, Sensible Portions®, and Spectrum®indefinite-lived tradenames remain at risk of impairment in future periods in the event of unfavorable changes in assumptions, including forecasted future cash flows based on execution of strategic initiatives for increasing revenue, as well as discount rates and other macroeconomic factors. The Sensible Portions®and Spectrum®intangible assets, which were quantitatively tested in the prior year, are part of the North America reportable segment and have remaining carrying value of $8,000 and $11,800, respectively, as of December 31, 2025.

Recent Accounting Pronouncements

Refer to Note 2, Basis of Presentation, in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Seasonality

Certain of our product lines have seasonal fluctuations. Hot tea and soup sales are stronger in colder months, while sales of snack foods are stronger in the warmer months. As such, our results of operations and our cash flows for any particular quarter are not indicative of the results we expect for the full year, and our historical seasonality may not be indicative of future quarterly results of operations. Historically, net sales and profitability in the first fiscal quarter have typically been the lowest of our four quarters.