Slides
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Hain Celestial Third Quarter Fiscal Year 2025 Financial Results
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Forward-Looking StatementsThis presentation contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks, uncertainties andassumptions. 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,” “expect,” “anticipate,” “may,” “should,” “plan,” “intend,” “potential,” “will” and similar expressions are intended to identify such forward-looking statements. Forward-looking statements include, among otherthings: our beliefs or expectations relating to our future performance, results of operations and financial condition, including statements related to the reevaluation of our strategy, our ability to evolve and positionHain for long-term sustainable growth, expectations regarding organic net sales trends, the effectiveness of our marketing, promotional, distribution and investment initiatives, our ability to capitalize on newopportunities, our ability to drive growth and create value for shareholders and the macroeconomic environment.Risks and uncertainties that may cause actual results to differ materially from forward-looking statements include: challenges and uncertainty resulting from the impact of competition; our ability to manage our supplychain effectively (including as a result of U.S. government tariffs and the imposition of any counter-tariffs); input cost inflation, including with respect to freight and other distribution costs; disruption of operations atour manufacturing facilities; reliance on independent contract manufacturers; changes to consumer preferences; customer concentration; our ability to execute our cost reduction initiatives and related strategicinitiatives; impairments in the carrying value of goodwill or other intangible assets; reliance on independent distributors; risks associated with operating internationally; the availability of organic ingredients; risksassociated with outsourcing arrangements; risks associated with geopolitical conflicts or events; our ability to identify and complete acquisitions or divestitures and our level of success in integrating acquisitions; ourreliance on independent certification for a number of our products; our ability to attract and retain highly skilled people; risks related to tax matters, including changes in tax policy, tariffs, or import and exportcontrols; the reputation of our company and our brands; our ability to use and protect trademarks; foreign currency exchange risk; general economic conditions; compliance with our credit agreement; cybersecurityincidents; disruptions to information technology systems; the impact of climate change and related disclosure regulations; liabilities, claims or regulatory change with respect to environmental matters; pending andfuture litigation, including litigation relating to Earth’s Best® baby food products; potential liability if our products cause illness or physical harm; the highly regulated environment in which we operate; compliance withdata privacy laws; the adequacy of our insurance coverage; and other risks and matters described in our most recent Annual Report on Form 10-K and our other filings from time to time with the U.S. Securities andExchange Commission.We undertake no obligation to update forward-looking statements to reflect actual results or changes in assumptions or circumstances, except as required by applicable law.
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Non-GAAP Financial MeasuresThis presentation includes non-GAAP financial measures, including, among others, organic net sales; adjusted gross profit and its related margin; adjusted operating income and its related margin; adjusted net income and itsrelated margin; diluted net income per common share, as adjusted; adjusted EBITDA and its related margin; free cash flow; and net debt. The reconciliations of historic non-GAAP financial measures to the comparable GAAPfinancial measures are provided in the tables below. These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures. In addition, these non-GAAP measuresmay not be the same as similar measures provided by other companies due to potential differences in methods of calculation and items being excluded. They should be read only in connection with the company’sconsolidated financial statements presented in accordance with GAAP .We define our non-GAAP financial measures as follows:Organic net sales: net sales excluding the impact of acquisitions, divestitures, held for sale businesses, discontinued brands, exited product categories and foreign exchange. To adjust organic net sales for the impact ofacquisitions, 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 includethe 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 incurrencies 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 monthlyexchange rate in effect during the current period of the current fiscal yearAdjusted gross profit and its related margin: gross profit, before plant closure related costs, net, warehouse and manufacturing consolidation and other costs, net, and other costs.Adjusted operating income and its related margin: operating loss before certain litigation expenses, net, plant closure related costs, net, warehouse and manufacturing consolidation and other costs, net, productivityand transformation costs, costs associated with acquisitions, divestitures and other transactions, goodwill impairment, long-lived asset and intangibles impairment and other costs.Adjusted net income and its related margin and diluted net income per common share, as adjusted: net loss, adjusted to exclude the impact of certain litigation expenses, net, plant closure related costs, net,warehouse and manufacturing consolidation and other costs, net, productivity and transformation costs, costs associated with acquisitions, divestitures and other transactions, (gains) losses on sales of assets, goodwillimpairment, long-lived asset and intangibles impairment, unrealized currency losses (gains) and other costs, and the related tax effects of such adjustments.Adjusted EBITDA and its related margin: net loss before net interest expense, income taxes, depreciation and amortization, equity in net loss of equity-method investees, stock-based compensation, net, unrealizedcurrency losses, certain litigation expenses, net, plant closure related costs, net, warehouse and manufacturing consolidation and other costs, net, productivity and transformation costs, costs associated withacquisitions, divestitures and other transactions, (gains) losses on sales of assets, goodwill impairment, long-lived asset and intangibles impairment and other adjustments.Free cash flow: net cash provided by operating activities less purchases of property, plant and equipment.Net debt: total debt less cash and cash equivalents.We believe that the non-GAAP financial measures presented provide useful additional information to investors about current trends in the company’s operations and are useful for period-over-period comparisons ofoperations. We provide:Organic net sales to demonstrate the growth rate of net sales excluding the impact of acquisitions, divestitures, held for sale businesses, discontinued brands, and exited product categories and foreign exchange, andbelieve organic net sales is useful to investors because it enables them to better understand the growth of our business from period to period.Adjusted results as important supplemental measures of our performance and believe they are frequently used by securities analysts, investors and other interested parties in the evaluation of our Company andcompanies in our industry.Free cash flow as one factor in evaluating the amount of cash available for discretionary investments.Net debt as a useful measure to monitor leverage and evaluate the balance sheet.We discuss the Company’s net secured leverage ratio as calculated under our credit agreement as a measure of our financial condition, liquidity and compliance with our credit agreement. For a description of the materialterms of our credit agreement and risks of non-compliance with our credit agreement, see “Liquidity and Capital Resources” under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”and “Risk Factors” in our most recent Annual Report on Form 10-K and our subsequent quarterly reports on Form 10-Q filed with the U.S. Securities and Exchange Commission.
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Dawn ZierChair of the Board
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Strategic Announcements 1. Leadership Transition2. Formal Review of Company Portfolio
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Alison LewisInterim President and CEO
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Lee BoyceChief Financial Officer
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Snacks•Underperformance in promotional activity and continued category softnessEarth’s Best•Delayed timing on formula recoveryCelestial Seasonings•Service issues at the start of tea season, consumption recovered in Q3Trade Investment & Inflation•Pricing not on pace to offset inflation Q3 FY25 Performance Challenges We’re Addressing
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Q3 Progress Made International returning to growth Sequential improvement in organic net sales trends Return to consumption growth in Celestial Seasonings Productivity and efficiency savings Ongoing reduction of working capital
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Focused On 5 Key Drivers to Shift Performance Simplifying our business Accelerating brand renovation and innovation Implementing strategic revenue growth management & pricing Driving productivity and working capital reduction Strengthening digital capabilities
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Q3 FY25 vs. LYQ3 FY25$’s in millions-11%$390Net Sales-5%$374Organic Net Sales-50 bps21.8%Adjusted Gross Margin-23%$34Adjusted EBITDA-140 bps8.6%Adjusted EBITDA Margin-46%$6Adjusted Net Income-46%$0.07Adjusted Earnings per ShareSee Appendix for reconciliation between non-GAAP and comparable GAAP financial measures. 22.3%21.8%Adjusted Gross Margin Bridge Q3 FY25Vol/Mix/OtherCOGS/InflationPricing/productivityQ3 FY24+250-465+165Performance Summary Organic Net Sales Growth Decomposition($’s millions)
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Q3 FY25 Segment Results – North America See Appendix for reconciliation between non-GAAP and comparable GAAP financial measures. $226$204Q3 FY24 Q3 FY25 Organic Net Sales ($’s millions) 22.2%22.4%Q3 FY24 Q3 FY25 Adjusted Gross Margin$28 $17 Q3 FY24 Q3 FY25 Adjusted EBITDA($’s millions)-10%+20 bps-38%
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Q3 FY25 Segment Results – International See Appendix for reconciliation between non-GAAP and comparable GAAP financial measures.$169$170Q3 FY24 Q3 FY25 Organic Net Sales ($’s millions)22.4%21.1%Q3 FY24 Q3 FY25 Adjusted Gross Margin$25$22Q3 FY24 Q3 FY25 Adjusted EBITDA($’s millions)+0.5% -130 bps-10%
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Q3 FY25 vs. LYQ3 FY25$’s in millionsOrganic Net Sales-13%$89Snacks-6%$60Baby & Kids-7%$64Beverages1%$161Meal PrepSee Appendix for reconciliation between non-GAAP and comparable GAAP financial measures. Category Performance
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Free Cash Flow And Working Capital Mgmt.$30 $(2)-$5$0$5$10$15$20$25$30$35Q3 FY24 Q3 FY25 Free Cash Flow($ millions)3761010203040506070FY 2023 Q3 FY25 Days Payable OutstandingImprovement from FY2382790102030405060708090FY 2023 Q3 FY25 Days Inventory OutstandingImprovement from FY23 Progress Towards FY27 Targets70+ Days Payable Outstanding and 55 Days Inventory Outstanding
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Continued Improvement In Net Debt $728$690$684$672$665$620$640$660$680$700$720$740Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 Q3 FY25 Net Debt $ millions3.93.73.94.14.23.43.53.63.73.83.94.04.14.24.3Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 Q3 FY25 Leverage Ratio* * Credit agreement consolidated secured leverage ratio Note: maximum consolidated secured leverage ratio under our credit agreement is 4.75x for the quarter ending 6/30/2025 through (and including) the quarter ending 3/31/2026, 4.50x for the quarter ending 6/30/2026, and 4.25x for the quarter ending 9/30/2026 and thereafter.Reduced Net Debt by $8 Million in Q3Making Progress Towards FY27 Goal of 2-3x Leverage Ratio
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Core markets United States Canada UK Ireland Western Europe In Region Production Makes Hain Less Subject To Tariffs
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FY25 GuidanceApprox. -5% to -6%Organic Net Sales GrowthApprox. $125 millionAdjusted EBITDAApprox. 21.5%Gross MarginApprox. $40 millionFree Cash FlowThe forward-looking non-GAAP financial measures included on this slide are not reconciled to the comparable forward-looking GAAP financial measures. The company is not able to reconcile these forward-looking non-GAAP financial measures to their most directly comparable forward-looking GAAP financial measures without unreasonable efforts because the company is unable to predict with a reasonabledegree of certainty the type and extent of certain items that would be expected to impact GAAP measures but would not impact the non-GAAP measures. Such items may include certain litigation andrelated expenses, transaction costs associated with acquisitions and divestitures, productivity and transformation costs, impairments, gains or losses on sales of assets and businesses, foreign exchangemovements and other items. The unavailable information could have a significant impact on the company’s GAAP financial results. Notes:•Our current estimate of baseline organic net sales for FY24 is $1,495million•Q1 FY24: $384•Q2 FY24: $414•Q3 FY24: $395•Q4 FY24: $380•Q1 FY25: $365•Q2 FY25: $391•Q3 FY25: $374 Revising Full Year Guidance
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•Positioning as pure-play better-for-you company particularly relevant in today’s dynamic regulatory environment•Solid business foundation with strong productivity delivery, positive free cash flow profile, reduction in debt•Key drivers to shift performance:Simplifying businessAccelerating brand renovation and innovationImplementing strategic RGM and pricing actionsDriving productivity and cost reductionStrengthening digital capabilities•Launching formal process to review portfolio to maximize shareholder value In Summary
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Q&A
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Appendix
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Net Sales, Gross Profit, Adjusted Gross Profit & Adjusted EBITDA by Segment (Q3 FY25 and Q3 FY24)North America International Corporate/Other Hain ConsolidatedNet SalesNet sales - Q3 FY25222,407$ 167,944$ -$ 390,351$ Net sales - Q3 FY24268,107$ 170,251$ -$ 438,358$ % change - FY25 net sales vs. FY24 net sales (17.0)% (1.4)% (11.0)%Gross ProfitQ3 FY25Gross profit49,178$ 35,472$ -$ 84,650$ Non-GAAP adjustments(1)592 - - 592 Adjusted gross profit49,770$ 35,472$ -$ 85,242$ % change - FY25 gross profit vs. FY24 gross profit (17.0)% (5.2)% (12.4)%% change - FY25 adjusted gross profit vs. FY24 adjusted gross profit (16.6)% (7.0)% (12.8)%Gross margin22.1%21.1%21.7%Adjusted gross margin22.4%21.1%21.8%Q3 FY24Gross profit59,237$ 37,434$ -$ 96,671$ Non-GAAP adjustments(1)406 691 - 1,097 Adjusted gross profit59,643$ 38,125$ -$ 97,768$ Gross margin22.1%22.0%22.1%Adjusted gross margin22.2%22.4%22.3%Adjusted EBITDAQ3 FY25Adjusted EBITDA17,306$ 22,166$ (5,857)$ 33,615$ % change - FY25 adjusted EBITDA vs. FY24 adjusted EBITDA (37.9)% (9.7)% 32.4% (23.2)%Adjusted EBITDA margin7.8%13.2%8.6%Q3 FY24Adjusted EBITDA27,883$ 24,547$ (8,668)$ 43,762$ Adjusted EBITDA margin10.4%14.4%10.0%(1) See accompanying table "Adjusted Gross Profit, Adjusted Operating Income, Adjusted Net Income and Adjusted Net Income per Diluted Share" THE HAIN CELESTIA L GROUP, INC. AND SUBSIDIARIESNet Sales, Gross Profit and Adjusted EBITDA by Segment(unaudited and in thousands)
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Adjusted Gross Profit, Adjusted Operating Income, Adjusted Net Income and Adjusted Net Income per Diluted Share (Q3 FY25 and Q3 FY24)Reconciliation of Gross Profit, GAAP to Gross Profit, as Adjusted:2025 2024 2025 2024Gross profit, GAAP 84,650$ 96,671$ 259,712$ 282,829$ Adjustments to Cost of sales:Warehouse/manufacturing consolidation and other costs, net 384 184 384 995 Plant closure related costs, net 208 913 1,395 6,535 Other - - - 1,443 Gross profit, as adjusted85,242$ 97,768$ 261,491$ 291,802$ Reconciliation of Operating Loss, GAAP to Operating Income, as Adjusted:2025 2024 2025 2024Operating loss, GAAP (121,079)$ (27,901)$ (209,925)$ (30,960)$ Adjustments to Cost of sales:Warehouse/manufacturing consolidation and other costs, net 384 184 384 995 Plant closure related costs, net 208 913 1,395 6,535 Other - - - 1,443 Adjustments to Operating expenses(a):Goodwill impairment 110,251 - 201,518 - Long-lived asset and intangibles impairment 24,012 49,426 42,029 70,786 Productivity and transformation costs 7,289 7,175 16,497 20,447 Certain litigation expenses, net(b) 407 458 2,254 4,073 Transaction and integration costs, net (151) 55 (574) 282 Plant closure related costs, net (213) 232 (166) 179 Operating income, as adjusted21,108$ 30,542$ 53,412$ 73,780$ (b) Expenses and items relating to securities class action, baby food litigation and SEC investigation.Third QuarterThird Quarter Year to Date(a) Operating expenses include amortization of acquired intangibles, selling, general and administrative expenses, goodwill impairment, long-lived asset and intangibles impairment and productivity and transformation costs. THE HAIN CELESTIAL GROUP, INC. AND SUBSIDIARIESAdjusted Gross Profit, Adjusted Operating Income, Adjusted Net Income and Adjusted Net Income per Diluted Share(unaudited and in thousands, except per share amounts)Third QuarterThird Quarter Year to Date
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Adjusted Gross Profit, Adjusted Operating Income, Adjusted Net Income and Adjusted Net Income per Diluted Share (Q3 FY25 and Q3 FY24) cont.Reconciliation of Net Loss, GAAP to Net Income, as Adjusted:2025 2024 2025 2024Net loss, GAAP (134,588)$ (48,194)$ (258,226)$ (72,105)$ Adjustments to Cost of sales:Warehouse/manufacturing consolidation and other costs, net 384 184 384 995 Plant closure related costs, net 208 913 1,395 6,535 Other - - - 1,443 Adjustments to Operating expenses(a):Goodwill impairment 110,251 - 201,518 - Long-lived asset and intangibles impairment 24,012 49,426 42,029 70,786 Productivity and transformation costs 7,289 7,175 16,497 20,447 Certain litigation expenses, net(b) 407 458 2,254 4,073 Transaction and integration costs, net (151) 55 (574) 282 Plant closure related costs, net (213) 232 (166) 179 Adjustments to Interest and other expense, net(c):Unrealized currency losses (gains) 1,255 (71) 825 83 (Gain) loss on sale of assets (106) - 2,202 62 Adjustments to (Benefit) provision for income taxes:Net tax impact of non-GAAP adjustments (2,693) 1,094 1,615 (14,139) Net income, as adjusted6,055$ 11,272$ 9,753$ 18,641$ Net loss margin (34.5)% (11.0)% (21.6)% (5.5)%Adjusted net income margin 1.6% 2.6% 0.8% 1.4%Diluted shares used in the calculation of net loss per common share: 90,247 89,832 90,080 89,718 Diluted shares used in the calculation of adjusted net income per common share: 90,407 90,058 90,287 90,088 Diluted net loss per common share, GAAP (1.49)$ (0.54)$ (2.87)$ (0.80)$ Diluted net income per common share, as adjusted 0.07$ 0.13$ 0.11$ 0.21$ (b) Expenses and items relating to securities class action, baby food litigation and SEC investigation.(c) Interest and other expense, net includes interest and other financing expenses, net, unrealized currency losses (gains), (gain) loss on sale of assets and other expense, net. Third QuarterThird Quarter Year to Date (a) Operating expenses include amortization of acquired intangibles, selling, general and administrative expenses, goodwill impairment, long-lived asset and intangibles impairment and productivity and transformation costs. THE HAIN CELESTIA L GROUP, INC. A ND SUBSIDIARIESAdjusted Gross Profit, Adjusted Operating Income, A djusted Net Income and Adjusted Net Income per Diluted Share(unaudited and in thousands, except per share amounts)
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Organic Net Sales by Segment (Q3 FY25 and Q3 FY24)Q3 FY25 North A merica InternationalHain ConsolidatedNet sales 222,407$ 167,944$ 390,351$ Less: Impact of divestitures, held for sale businesses, discontinued brands and exited product categories 19,477 493 19,970 Less: Impact of foreign currency exchange (1,428) (2,327) (3,755) Organic net sales 204,358$ 169,778$ 374,136$ Q3 FY24Net sales 268,107$ 170,251$ 438,358$ Less: Impact of divestitures, held for sale businesses, discontinued brands and exited product categories 42,008 1,239 43,247 Organic net sales 226,099$ 169,012$ 395,111$ Net sales decline (17.0)% (1.4)% (11.0)%Less: Impact of divestitures, held for sale businesses, discontinued brands and exited product categories (6.9)% (0.5)% (4.8)%Less: Impact of foreign currency exchange (0.5)% (1.4)% (0.9)%Organic net sales (decline) growth(9.6)% 0.5% (5.3)%THE HAIN CELESTIA L GROUP, INC. AND SUBSIDIA RIESOrganic Net Sales Growth by Segment(unaudited and in thousands)
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Organic Net Sales by Category (Q3 FY25 and Q3 FY24)Q3 FY25 Snacks Baby & Kids Beverages Meal Prep Personal CareHain ConsolidatedNet sales 88,506$ 59,896$ 62,874$ 162,266$ 16,809$ 390,351$ Less: Impact of divestitures, held for sale businesses, discontinued brands and exited product categories 162 2 - 2,997 16,809 19,970 Less: Impact of foreign currency exchange (705) (293) (1,005) (1,752) - (3,755) Organic net sales 89,049$ 60,187$ 63,879$ 161,021$ -$ 374,136$ Q3 FY24Net sales 111,157$ 64,317$ 68,384$ 165,675$ 28,825$ 438,358$ Less: Impact of divestitures, held for sale businesses, discontinued brands and exited product categories 8,629 278 - 5,515 28,825 43,247 Organic net sales 102,528$ 64,039$ 68,384$ 160,160$ -$ 395,111$ Net sales decline (20.4)% (6.9)% (8.1)% (2.1)% (41.7)% (11.0)%Less: Impact of divestitures, held for sale businesses, discontinued brands and exited product categories (6.7)% (0.4)% 0.0% (1.5)% n/a (4.8)%Less: Impact of foreign currency exchange (0.6)% (0.5)% (1.5)% (1.1)% n/a (0.9)%Organic net sales (decline) growth(13.1)% (6.0)% (6.6)% 0.5% n/a (5.3)% THE HAIN CELESTIAL GROUP, INC. A ND SUBSIDIA RIESOrganic Net Sales Growth by Category(unaudited and in thousands)
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Adjusted EBITDA (Q3 FY25 and Q3 FY24)2025 2024Net loss (134,588)$ (48,194)$ Depreciation and amortization 10,455 10,858 Equity in net loss of equity-method investees 966 966 Interest expense, net 11,096 13,322 (Benefit) provision for income taxes (505) 5,100 Stock-based compensation, net 2,973 3,017 Unrealized currency losses 1,137 250 Certain litigation expenses, net(a) 407 458 Restructuring activitiesProductivity and transformation costs 7,289 7,175 Warehouse/manufacturing consolidation and other costs, net 384 184 Plant closure related costs, net (5) 1,145 Acquisitions, divestitures and other(Gain) loss on sale of assets (106) - Transaction and integration costs, net (151) 55 Impairment chargesGoodwill impairment110,251 - Long-lived asset and intangibles impairment 24,012 49,426 Other - - Adjusted EBITDA 33,615$ 43,762$ (a) Expenses and items relating to securities class action, baby food litigation and SEC investigation. THE HAIN CELESTIA L GROUP, INC. AND SUBSIDIARIESA djusted EBITDA(unaudited and in thousands)Third Quarter
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Net Debt (Q3 FY25 – Q3 FY24) March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024DebtLong-term debt, less current portion 701,401$ 721,076$ 732,799$ 736,523$ 769,948$ Current portion of long-term debt 7,554 7,564 7,567 7,569 7,569 Total debt 708,955 728,640 740,366 744,092 777,517 Less: Cash and cash equivalents 44,425 56,200 56,853 54,307 49,549 Net debt 664,530$ 672,440$ 683,513$ 689,785$ 727,968$ THE HA IN CELESTIAL GROUP, INC. AND SUBSIDIA RIESNet Debt(unaudited and in thousands)
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Free Cash Flow (Q3 FY25 and Q3 FY24) 2025 2024Net cash provided by operating activities 4,645$ 42,274$ Purchases of property, plant and equipment (6,921) (12,034) Free cash flow (2,276)$ 30,240$ THE HAIN CELESTIAL GROUP, INC. A ND SUBSIDIA RIESFree Cash Flow(unaudited and in thousands)Third Quarter
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Thank You!