HAIN CELESTIAL GROUP INCHAIN

HAIN CELESTIAL GROUP INC Leases Disclosure

10-KFiled Aug 24, 20233 min read
LEASES
The Company leases office space, warehouse and distribution facilities, manufacturing equipment and vehicles primarily in North America and Europe. The Company determines if an arrangement is or contains a lease at inception. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company’s lease agreements generally do not contain residual value guarantees or material restrictive covenants. A limited number of lease agreements include rental payments adjusted periodically for inflation.

Certain of the Company’s leases contain variable lease payments, which are expensed as incurred unless those payments are based on an index or rate. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at lease commencement and included in the measurement of the lease liability; thereafter, changes to lease payments due to rate or index changes are recorded as variable lease expense in the period incurred. The Company does not have any related party leases, and sublease transactions are de minimis.

The components of lease expenses for the fiscal years ended June 30, 2023, 2022 and 2021 were as follows:

 Fiscal Year Ended
202320222021
Operating lease expenses (a)
$18,173 $15,911 $16,403 
Finance lease expenses (a)
227 251 391 
Variable lease expenses740 1,010 1,423 
Short-term lease expenses2,003 3,394 2,387 
Total lease expenses$21,143 $20,566 $20,604 

Supplemental balance sheet information related to leases is as follows:

LeasesClassificationFiscal Year Ended June 30,
20232022
Assets
Operating lease ROU assetsOperating lease right-of-use assets$95,894 $114,691 
Finance lease ROU assets, netProperty, plant and equipment, net289 413 
Total leased assets$96,183 $115,104 
Liabilities
Current
OperatingAccrued expenses and other current liabilities$10,489 $13,154 
FinanceCurrent portion of long-term debt83 149 
Non-current
Operating Operating lease liabilities, noncurrent portion90,014 107,481 
FinanceLong-term debt, less current portion222 278 
Total lease liabilities $100,808 $121,062 
Additional information related to leases is as follows:
Fiscal Year Ended June 30,
202320222021
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$16,446 $15,462 $16,738 
Operating cash flows from finance leases$16 $20 $17 
Financing cash flows from finance leases$161 $226 $338 
ROU assets obtained in exchange for lease obligations:
Operating leases(1)
$(2,627)$39,435 $25,446 
Finance leases$118 $116 $690 
Weighted average remaining lease term:
Operating leases10.4 years9.3 years9.8 years
Finance leases3.9 years4.1 years4.0 years
Weighted average discount rate:
Operating leases4.8 %3.9 %3.3 %
Finance leases4.7 %4.1 %3.9 %
(1) Includes adjustment for modification of an operating lease for the fiscal year ended June 30, 2023, which resulted in a reduction of ROU assets and lease liabilities of $13,876 and $17,244, respectively, and recognition of a gain of $3,368 related to the modification.

Maturities of lease liabilities as of June 30, 2023 were as follows:

Fiscal YearOperating leasesFinance leasesTotal
2024$15,087 $74 $15,161 
202512,939 101 13,040 
202612,221 76 12,297 
202711,897 59 11,956 
202811,960 25 11,985 
Thereafter66,118 — 66,118 
Total lease payments130,222 335 130,557 
Less: Imputed interest29,719 30 29,749 
Total lease liabilities$100,503 $305 $100,808 

Subsequent to June 30, 2023, the Company entered into an operating lease for its new global headquarters, which has not yet commenced. Obligations under this lease are approximately $12,849, and the lease is expected to commence during the first quarter of fiscal year ending June 30, 2024, with an initial lease term of 10.5 years excluding renewal options.
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Historical Timeline

Fiscal YearFiled
2023Aug 24, 2023Showing above
2022Aug 25, 2022
2021Aug 26, 2021
2020Aug 25, 2020

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

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