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Correction of Immaterial Errors To Prior Period Financial Statements | 9 Months Ended
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Mar. 31, 2017
Accounting Changes and Error Corrections [Abstract] |
Correction of Immaterial Errors To Prior Period Financial Statements | CORRECTION OF IMMATERIAL ERRORS TO PRIOR PERIOD FINANCIAL STATEMENTS Accounting Review During the fourth quarter of fiscal 2016, the Company identified the practice of granting additional concessions to certain distributors in the United States and commenced an internal accounting review in order to (i) determine whether the revenue associated with those concessions was accounted for in the correct period and (ii) evaluate the Company’s internal control over financial reporting. The Audit Committee of the Company’s Board of Directors separately conducted an independent review of these matters and retained independent counsel to assist in their review. On November 16, 2016, the Company announced that the independent review of the Audit Committee was completed and that the review found no evidence of intentional wrongdoing in connection with the preparation of the Company’s financial statements. The aforementioned reviews identified material weaknesses in our internal control over financial reporting. Refer to “Part I, Item 4. Controls and Procedures” of the Form 10-Q for a description of these material weaknesses and management’s plan and implementation of remediation efforts to address these material weaknesses. Although the initial focus of the Company’s internal accounting review discussed above pertained to the evaluation of the timing of the recognition of the revenue associated with the practice of granting additional concessions to certain distributors, the Company subsequently expanded its internal accounting review and performed an analysis of previously-issued financial statements in order to identify and assess other potential errors. Based upon this review, the Company identified certain immaterial errors relating to its previously-issued financial statements which resulted in revisions to our previously-issued financial statements. Accordingly, prior period amounts presented in the consolidated financial statements and the related notes have been revised (referred to as the “Revision”). All costs incurred in connection with the internal accounting review, the Audit Committee’s independent review and related matters are included in “Accounting review costs,” in the Company’s Consolidated Statements of Income. Based on an analysis of Accounting Standards Codification (“ASC”) 250 - “Accounting Changes and Error Corrections” (“ASC 250”), Staff Accounting Bulletin 99 - “Materiality” (“SAB 99”) and Staff Accounting Bulletin 108 - Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements (“SAB 108”), the Company determined that these errors were immaterial to the previously-issued financial statements; however, a cumulative correction of these errors would have had a material impact on the financial results for the three and twelve months ended June 30, 2016. Accordingly, we have revised our presentation of certain amounts in the consolidated financial statements for the three and nine months ended March 31, 2016 to reflect such corrections as if they had been recorded in the appropriate fiscal period. We refer the reader to the Company’s Form 10-K for the fiscal year ended June 30, 2016 for a detailed explanation of the immaterial errors. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
| Three Months Ended March 31, 2016
| As Reported |  | Adjustment |  | As Revised
Net sales | $ | 749,862 |  |  | $ | (13,199 | ) |  | $ | 736,663 |
Cost of sales | 576,653 |  |  | 102 |  |  | 576,755 |
Gross profit | 173,209 |  |  | (13,301 | ) |  | 159,908 |
Selling, general and administrative expenses | 93,915 |  |  | (15,025 | ) |  | 78,890 |
Amortization of acquired intangibles | 4,586 |  |  | (33 | ) |  | 4,553 |
Acquisition related expenses, restructuring and integration charges and other | 5,701 |  |  | (384 | ) |  | 5,317 |
Operating income | 69,007 |  |  | 2,141 |  |  | 71,148 |
Interest and other financing expense, net | 6,920 |  |  | — |  |  | 6,920 |
Other (income)/expense, net | 378 |  |  | — |  |  | 378 |
Gain on fire insurance recovery | (9,013 | ) |  |  |  | (9,013 | )
Income before income taxes and equity in earnings of equity- method investees | 70,722 |  |  | 2,141 |  |  | 72,863 |
Provision for income taxes | 21,576 |  |  | 2,338 |  |  | 23,914 |
Equity in net income of equity-method investees | 161 |  |  | — |  |  | 161 |
Net income | $ | 48,985 |  |  | $ | (197 | ) |  | $ | 48,788 |
Net income per common share: |  |  |  |  |
Basic | $ | 0.47 |  |  | $ | — |  |  | $ | 0.47 |
Diluted | $ | 0.47 |  |  | $ | — |  |  | $ | 0.47 |
Weighted average common shares outstanding: |  |  |  |  |
Basic | 103,265 |  |  | 103,265 |  |  | 103,265 |
Diluted | 104,087 |  |  | 104,087 |  |  | 104,087 |
* Net income per common share may not add in certain periods due to rounding CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (CONTINUED)
| Nine Months Ended March 31, 2016
| As Reported |  | Adjustment |  | As Revised
Net sales | $ | 2,189,639 |  |  | $ | (41,812 | ) |  | $ | 2,147,827 |
Cost of sales | 1,686,820 |  |  | (3,043 | ) |  | 1,683,777 |
Gross profit | 502,819 |  |  | (38,769 | ) |  | 464,050 |
Selling, general and administrative expenses | 262,776 |  |  | (39,355 | ) |  | 223,421 |
Amortization/impairment of acquired intangibles | 13,994 |  |  | (98 | ) |  | 13,896 |
Acquisition related expenses, restructuring and integration charges and other | 11,852 |  |  | (617 | ) |  | 11,235 |
Operating income | 214,197 |  |  | 1,301 |  |  | 215,498 |
Interest and other financing expense, net | 19,760 |  |  | (73 | ) |  | 19,687 |
Other (income)/expense, net | 8,771 |  |  | 73 |  |  | 8,844 |
Gain on fire insurance recovery | (9,013 | ) |  | — |  |  | (9,013 | )
Income before income taxes and equity in earnings of equity- method investees | 194,679 |  |  | 1,301 |  |  | 195,980 |
Provision for income taxes | 57,337 |  |  | 2,509 |  |  | 59,846 |
Equity in net income of equity-method investees | 108 |  |  | — |  |  | 108 |
Net income | 137,234 |  |  | (1,208 | ) |  | 136,026 |
Net income per common share: |  |  |  |  |
Basic | $ | 1.33 |  |  | $ | (0.01 | ) |  | $ | 1.32 |
Diluted | $ | 1.32 |  |  | $ | (0.01 | ) |  | $ | 1.31 |
Weighted average common shares outstanding: |  |  |  |  |
Basic | 103,030 |  |  | 103,030 |  |  | 103,030 |
Diluted | 104,168 |  |  | 104,168 |  |  | 104,168 |
* Net income per common share may not add in certain periods due to rounding CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
|  | Three Months Ended March 31, 2016 |  | Nine Months Ended March 31, 2016
|  | As Reported |  | Adjustment |  | As Revised |  | As Reported |  | Adjustment |  | As Revised
Net income |  | $ | 48,985 |  |  | $ | (197 | ) |  | $ | 48,788 |  |  | $ | 137,234 |  |  | $ | (1,208 | ) |  | $ | 136,026 |
Other comprehensive income (loss): |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency translation adjustments |  | $ | (20,296 | ) |  | $ | 193 |  |  | (20,103 | ) |  | $ | (86,380 | ) |  | 690 |  |  | (85,690 | )
Change in deferred gains (losses) on cash flow hedging instruments |  | (1,209 | ) |  | — |  |  | (1,209 | ) |  | (164 | ) |  | — |  |  | (164 | )
Change in unrealized gain (loss) on available for sale investment |  | 20 |  |  | — |  |  | 20 |  |  | (112 | ) |  | — |  |  | (112 | )
Total other comprehensive income (loss) |  | $ | (21,485 | ) |  | $ | 193 |  |  | $ | (21,292 | ) |  | $ | (86,656 | ) |  | $ | 690 |  |  | $ | (85,966 | )
Total comprehensive income |  | $ | 27,500 |  |  | $ | (4 | ) |  | $ | 27,496 |  |  | $ | 50,578 |  |  | $ | (518 | ) |  | $ | 50,060 |
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
| Nine Months Ended March 31, 2016
| As Reported |  | Adjustment |  | As Revised
CASH FLOWS FROM OPERATING ACTIVITIES |  |  |  |  |
Net income | $ | 137,234 |  |  | $ | (1,208 | ) |  | $ | 136,026 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: |  |  |  |  |
Depreciation and amortization | 47,494 |  |  | 605 |  |  | 48,099 |
Deferred income taxes | (9,377 | ) |  | (155 | ) |  | (9,532 | )
Equity in net income of equity-method investees | 108 |  |  | — |  |  | 108 |
Stock-based compensation | 10,005 |  |  | — |  |  | 10,005 |
Contingent consideration expense | 1,511 |  |  | — |  |  | 1,511 |
Gain on fire insurance recovery and other, net | (8,401 | ) |  | — |  |  | (8,401 | )
Other non-cash items, including unrealized currency (gains)/loss, net | 7,403 |  |  | — |  |  | 7,403 |
Increase (decrease) in cash attributable to changes in operating assets and liabilities, net of amounts applicable to acquisitions: |  |  |  |  |
Accounts receivable | (29,201 | ) |  | (1,260 | ) |  | (30,461 | )
Inventories | (11,397 | ) |  | 621 |  |  | (10,776 | )
Other current assets | (650 | ) |  | 22,691 |  |  | 22,041 |
Other assets and liabilities | 1,111 |  |  | — |  |  | 1,111 |
Accounts payable and accrued expenses | (13,986 | ) |  | (21,294 | ) |  | (35,280 | )
Net cash provided by operating activities | $ | 131,854 |  |  | $ | — |  |  | $ | 131,854 |
There were no adjustments to cash balances and to cash flows from investing and financing activities for the nine months ended March 31, 2016 as a result of the Revision. SEGMENT NET SALES AND OPERATING INCOME (UNAUDITED)
| Three months ended March 31, 2016
| As Reported (1) |  | Adjustment |  | As Revised
Net Sales: |  |  |  |  |
United States | $ | 332,904 |  |  | $ | (7,520 | ) |  | $ | 325,384 |
United Kingdom | 208,391 |  |  | (2,231 | ) |  | $ | 206,160 |
Hain Pure Protein | 113,643 |  |  | (1,430 | ) |  | $ | 112,213 |
Rest of World | 94,924 |  |  | (2,018 | ) |  | $ | 92,906 |
| $ | 749,862 |  |  | $ | (13,199 | ) |  | $ | 736,663 |
Operating Income: |  |  |  |  |
United States | $ | 52,103 |  |  | $ | 4,278 |  |  | $ | 56,381 |
United Kingdom | 16,217 |  |  | (391 | ) |  | $ | 15,826 |
Hain Pure Protein | 4,613 |  |  | (2,186 | ) |  | $ | 2,427 |
Rest of World | 8,641 |  |  | (509 | ) |  | $ | 8,132 |
| $ | 81,574 |  |  | $ | 1,192 |  |  | $ | 82,766 |
Corporate and Other | (12,567 | ) |  | 949 |  |  | (11,618 | )
| $ | 69,007 |  |  | $ | 2,141 |  |  | $ | 71,148 |
(1) The information previously reported for the three months ended March 31, 2016 has been adjusted to reflect the Company’s new operating and reporting structure effective in the first quarter of fiscal 2017. See Note 1, Business, and Note 16, Segment Information, for additional details surrounding the formation of Cultivate.
| Nine months ended March 31, 2016
| As Reported (1) |  | Adjustment |  | As Revised
Net Sales: |  |  |  |  |
United States | $ | 970,368 |  |  | $ | (27,668 | ) |  | $ | 942,700 |
United Kingdom | 567,971 |  |  | (9,702 | ) |  | $ | 558,269 |
Hain Pure Protein | 379,337 |  |  | 122 |  |  | $ | 379,459 |
Rest of World | 271,963 |  |  | (4,564 | ) |  | $ | 267,399 |
| $ | 2,189,639 |  |  | $ | (41,812 | ) |  | $ | 2,147,827 |
Operating Income: |  |  |  |  |
United States | $ | 144,305 |  |  | $ | 4,523 |  |  | $ | 148,828 |
United Kingdom | 45,189 |  |  | (1,096 | ) |  | $ | 44,093 |
Hain Pure Protein | 33,009 |  |  | (1,931 | ) |  | $ | 31,078 |
Rest of World | 17,910 |  |  | (264 | ) |  | $ | 17,646 |
| $ | 240,413 |  |  | $ | 1,232 |  |  | $ | 241,645 |
Corporate and Other | (26,216 | ) |  | 69 |  |  | (26,147 | )
| $ | 214,197 |  |  | $ | 1,301 |  |  | $ | 215,498 |
(1) The information previously reported for the nine months ended March 31, 2016 has been adjusted to reflect the Company’s new operating and reporting structure effective in the first quarter of fiscal 2017. See Note 1, Business, and Note 16, Segment Information, for additional details surrounding the formation of Cultivate.

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