XML 33 R13.htm IDEA: XBRL DOCUMENT
v3.19.3.a.u2

Discontinued Operations | 6 Months Ended
--- | ---
Dec. 31, 2019
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | DISCONTINUED OPERATIONS Sale of Tilda Business On August 27, 2019, the Company and the Purchaser entered into, and consummated the transactions contemplated by the Sale and Purchase Agreement. Under the Sale and Purchase Agreement, the Company sold the entities comprising its Tilda operating segment (the “Tilda Group Entities”) and certain other assets of the Tilda business to the Purchaser for an aggregate price of $342,000 in cash, subject to customary post-closing adjustments based on the balance sheets of the Tilda business. The other assets sold in the transaction consisted of raw materials, consumables, packaging, and finished and unfinished goods related to the Tilda business held by other Company entities that are not Tilda Group Entities. In January 2020, the Company and the Purchaser agreed to fully resolve all matters relating to post-closing adjustments to the sale price, resulting in a final aggregate sale price of $341,800. The Company used the proceeds from the sale to pay down the remaining outstanding borrowings under its term loan and a portion of its revolving credit facility. The Sale and Purchase Agreement contains representations, warranties and covenants that are customary for a transaction of this nature. The Company also entered into certain ancillary agreements with the Purchaser and certain of the Tilda Group Entities in connection with the Sale and Purchase Agreement, including a transitional services agreement (the "TSA") pursuant to which the Company and the Purchaser provide transitional services to one another, and business transfer agreements pursuant to which the applicable Tilda Group Entities will transfer certain non-Tilda assets and liabilities in India and the United Arab Emirates to subsidiaries of the Company to be formed in those countries. Additionally, the Company will distribute certain Tilda products in the United States, Canada and Europe through the expiration of the TSA. The disposition of the Tilda operating segment represented a strategic shift that had a major impact on the Company’s operations and financial results and has been accounted for as discontinued operations. The following table presents the major classes of Tilda’s results within “Net loss from discontinued operations, net of tax” in our Consolidated Statements of Operations:
| Three Months Ended December 31, |  |  |  | Six Months Ended December 31, |  |
| 2019 |  | 2018 |  | 2019 |  | 2018
Net sales | $ | 2,667 |  |  | $ | 50,590 |  |  | $ | 30,399 |  |  | $ | 92,945 |
Cost of sales | 2,496 |  |  | 37,668 |  |  | 26,648 |  |  | 69,337 |
Gross profi t | 171 |  |  | 12,922 |  |  | 3,751 |  |  | 23,608 |
Selling, general and administrative expense | 246 |  |  | 6,892 |  |  | 5,185 |  |  | 13,172 |
Other expense | 824 |  |  | 537 |  |  | 1,172 |  |  | 1,083 |
Interest expense(1) | — |  |  | 3,391 |  |  | 2,432 |  |  | 6,782 |
Translation loss(2) | — |  |  | — |  |  | 95,120 |  |  | — |
Loss (gain) on sale of discontinued operations | 3,752 |  |  | — |  |  | (10,170) |  |  | — |
Net (loss) income from discontinued operations before income taxes | (4,651) |  |  | 2,102 |  |  | (89,988) |  |  | 2,571 |
(Benefit) provision for income taxes(3) | (1,835) |  |  | (407) |  |  | 13,865 |  |  | 76 |
Net (loss) income from discontinued operations, net of tax | $ | (2,816) |  |  | $ | 2,509 |  |  | $ | (103,853) |  |  | $ | 2,495 |
(1) Interest expense was allocated to discontinued operations based on borrowings repaid with proceeds from the sale of Tilda. (2) At the completion of the sale of Tilda, the Company reclassified $95,120 of related cumulative translation losses from Accumulated other comprehensive loss to discontinued operations, net of tax. (3) Includes a tax (benefit) provision related to the tax gain on the sale of Tilda of $(1,250) and $15,250 for the three and six months ended December 31, 2019, respectively. Assets and liabilities of discontinued operations associated with Tilda presented in the Consolidated Balance Sheets as of June 30, 2019 are included in the following table:
|  | June 30,
ASSETS |  | 2019
Cash and cash equivalents |  | $ | 8,509 |
Accounts receivable, less allowance for doubtful accounts |  | 26,955 |
Inventories |  | 65,546 |
Prepaid expenses and other current assets |  | 9,038 |
Total current assets of discontinued operations(1) |  | 110,048 |
Property, plant and equipment, net |  | 40,516 |
Goodwill |  | 133,098 |
Trademarks and other intangible assets, net |  | 84,925 |
Other assets |  | 628 |
Total noncurrent assets of discontinued operations(1) |  | 259,167 |
Total assets of discontinued operations |  | $ | 369,215 |
LIABILITIES |  |
Accounts payable |  | $ | 18,341 |
Accrued expenses and other current liabilities |  | 4,675 |
Current portion of long-term debt |  | 8,687 |
Total current liabilities of discontinued operations(1) |  | 31,703 |
Deferred tax liabilities |  | 17,153 |
Other noncurrent liabilities |  | 208 |
Total noncurrent liabilities of discontinued operations(1) |  | 17,361 |
Total liabilities of discontinued operations(1) |  | $ | 49,064 |
(1) Assets and liabilities from discontinued operations were classified as current and noncurrent at June 30, 2019 as they did not meet the held-for-sale criteria. Sale of Hain Pure Protein Reportable Segment In March 2018, the Company’s Board of Directors approved a plan to sell all of the operations of the HPPC operating segment, which included the Plainville Farms and FreeBird businesses, and the EK Holdings, Inc. (“Empire Kosher” or “Empire”) operating segment, which were reported in the aggregate as the Hain Pure Protein reportable segment. Collectively, these dispositions represented a strategic shift that had a major impact on the Company’s operations and financial results and have been accounted for as discontinued operations. The Company is presenting the operating results and cash flows of Hain Pure Protein within discontinued operations in the current and prior periods. Sale of Plainville Farms Business On February 15, 2019, the Company completed the sale of substantially all of the assets used primarily for the Plainville Farms business (a component of HPPC), which included $25,000 in cash to the purchaser, for a nominal purchase price. In addition, the purchaser assumed the current liabilities of the Plainville Farms business as of the closing date. As a condition to consummating the sale, the Company entered into a Contingent Funding and Earnout Agreement, which provided for the issuance by the Company of an irrevocable stand-by letter of credit (the “Letter of Credit”) of $10,000 which expires nineteen months after issuance. As of June 30, 2019, the purchaser has fully drawn against the Letter of Credit. The Company is entitled to receive an earnout not to exceed, in the aggregate, 120% of the maximum amount that the purchaser draws on the Letter of Credit at any point from the date of issuance through the expiration of the Letter of Credit. Earnout payments are based on a specified percentage of annual free cash flow achieved for all fiscal years ending on or prior to June 30, 2026. If a subsequent change in control of the Plainville Farms business occurs prior to June 30, 2026, the purchaser will pay the Company 120% of the difference between the amount drawn on the Letter of Credit less the sum of all earnout payments made prior to such time up to the net proceeds received by the purchaser. At December 31, 2019, the Company had not recorded an asset associated with the earnout. Sale of HPPC and Empire Kosher On June 28, 2019, the Company completed the sale of the remainder of HPPC and EK Holdings, which included the FreeBird and Empire Kosher businesses. The purchase price, net of estimated customary adjustments based on the closing balance sheet of HPPC, was $77,714. The Company is in the process of finalizing the closing adjustments. The Company used the proceeds from the sale to pay down a portion of its outstanding borrowings under its term loan. The following table presents the major classes of Hain Pure Protein’s results within “Net loss from discontinued operations, net of tax” in our Consolidated Statements of Operations:
| Three Months Ended December 31, |  |  | Six Months Ended December 31, |  |
| 2019 |  | 2018 | 2019 |  | 2018
Net sales | $ | — |  |  | $ | 147,181 |  | $ | — |  |  | $ | 260,720 |
Cost of sales | — |  |  | 144,682 |  | — |  |  | 267,796 |
Gross profit (loss) | — |  |  | 2,499 |  | — |  |  | (7,076) |
Selling, general and administrative expense | — |  |  | 4,750 |  | — |  |  | 8,992 |
Asset impairments | — |  |  | 54,946 |  | — |  |  | 57,904 |
Other expense | — |  |  | 2,478 |  | — |  |  | 5,195 |
Loss on sale of discontinued operations(1) | — |  |  | — |  | 1,424 |  |  | — |
Net loss from discontinued operations before income taxes | — |  |  | (59,675) |  | (1,424) |  |  | (79,167) |
Benefit for income taxes | — |  |  | (22,452) |  | (393) |  |  | (27,620) |
Net loss from discontinued operations, net of tax | $ | — |  |  | $ | (37,223) |  | $ | (1,031) |  |  | $ | (51,547) |
(1) Primarily relates to preliminary closing balance sheet adjustments. There were no assets or liabilities from discontinued operations associated with Hain Pure Protein at December 31, 2019 or June 30, 2019.

X
- References No definition available. + Details
Name: | us-gaap_DiscontinuedOperationsAndDisposalGroupsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
Name: | us-gaap_DisposalGroupsIncludingDiscontinuedOperationsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration