Correction of Immaterial Errors To Prior Period Financial Statements

12 Months Ended

Jun. 30, 2016

Accounting Changes and Error Corrections [Abstract]

Correction of Immaterial Errors To Prior Period Financial Statements

CORRECTION OF IMMATERIAL ERRORS TO PRIOR PERIOD FINANCIAL STATEMENTS

During the year ended June 30, 2016, the Company identified and corrected immaterial errors that affected previously issued consolidated financial statements. 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 effect 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 which are described further below.

Revenue Corrections

The Company recognizes revenue from the sale of products to its customers when ownership of the product transfers to the customer.  Ownership transfers to the customer either upon shipment of the product to the customer or when the product is delivered to the customer. The Company has corrected errors in the timing of revenue recognition for customers whose ownership transferred when the product is delivered to the customer by reducing revenue by $26,144 and $630 for the years ended June 30, 2015 and 2014, respectively.

The Company also offers trade promotions and sales incentives to its customers and consumers to increase demand for its products.  The accounting principles of ASC 605-50, Customer Payments and Incentives, requires that the cost of an incentive be recorded at the later of the date on which the related revenue is recognized or the date on which the sales incentive is offered. Revenue was reduced by $5,796 and $6,854 for the years ended June 30, 2015 and 2014, respectively, to correct for errors related to the appropriate timing of customer payments and incentives associated with trade promotions. The two previously described errors reduced income before income taxes and equity in earnings of equity-method investees by $6,214 and $5,982 for the years ended June 30, 2015 and 2014, respectively. The errors also were corrected in the related cost of sales, accounts receivable and inventory accounts.

In addition, the Company reclassified certain customer payments and incentives related to trade promotions from selling, general and administrative expense and cost of goods sold, to be presented as a reduction in revenue in accordance with the provisions of ASC 605-50. This correction reduced revenue by $46,962 and $38,305 for the years ended June 30, 2015 and 2014, respectively, but did not affect operating income in any period.

In total, these three revenue corrections reduced revenue $78,902 and $45,789 for the years ended June 30, 2015 and 2014, respectively.

Other Corrections

The Company corrected other immaterial errors which primarily relate to the timing of inventory impairment charges, certain accruals including freight, bonuses, severance and related personnel costs, and a change to the timing of a previously recorded United Kingdom tradename impairment. In addition, the Company recorded certain adjustments to income taxes, including reflecting the tax effect of the aforementioned adjustments. The following table summarizes the effect of the corrections on income before income taxes and equity in earnings of equity method investees on the consolidated statement of income for the years ended June 30, 2015 and 2014:

	Fiscal Year Ended June 30,
	2015			2014
Effect of Revenue Corrections	$	(6,214	)	$	(5,982	)
Timing of Tradename Impairment	5,510			(6,399		)
Other Corrections	(1,717		)	1,947
Effect of all corrections on income before income taxes and equity   in earnings of equity-method investees	$	(2,421	)	$	(10,434	)

Certain of the revenue and other corrections discussed above affected periods prior to fiscal 2014, and this effect has been reflected as a cumulative, net of tax adjustment to reduce retained earnings as of July 1, 2013 by $30,688. The effect of the Revision to the Company’s previously-issued fiscal 2014 and 2015 financial statements is illustrated in the tables below. Amounts throughout the consolidated financial statements and notes thereto have been adjusted to incorporate the revised amounts, where applicable.

REVISED CONSOLIDATED BALANCE SHEET

The following table reconciles the Company’s consolidated balance sheet at June 30, 2015 from the previously reported amounts to the revised amounts:

	June 30, 2015
	As Reported			Adjustment			As Revised
ASSETS
Current assets:
Cash and cash equivalents	$	166,922		$	—		$	166,922
Accounts receivable, less allowance for doubtful accounts of $896	320,197			(57,089		)	263,108
Inventories	382,211			15,108			397,319
Deferred income taxes	20,758			17,748			38,506
Prepaid expenses and other current assets	42,931			20,009			62,940
Total current assets	933,019			(4,224		)	928,795
Property, plant and equipment, net	344,262			9,402			353,664
Goodwill	1,136,079			(401		)	1,135,678
Trademarks and other intangible assets, net	647,754			(1,362		)	646,392
Investments and joint ventures	2,305			—			2,305
Other assets	33,851			(1,277		)	32,574
Total assets	$	3,097,270		$	2,138		$	3,099,408
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	251,999		$	22,448		$	274,447
Accrued expenses and other current liabilities	79,167			6,466			85,633
Current portion of long-term debt	31,275			—			31,275
Total current liabilities	362,441			28,914			391,355
Long-term debt, less current portion	812,608			—			812,608
Deferred income taxes	145,297			5,844			151,141
Other noncurrent liabilities	5,237			11,400			16,637
Total liabilities	1,325,583			46,158			1,371,741
Stockholders’ equity:
Preferred stock - $.01 par value, authorized 5,000 shares; issued and outstanding: none	—			—			—
Common stock - $.01 par value, authorized 150,000 shares; issued: 105,841 shares; outstanding: 102,612 shares	1,058			—			1,058
Additional paid-in-capital	1,073,671			(1,244		)	1,072,427
Retained earnings	797,514			(43,551		)	753,963
Accumulated other comprehensive loss	(42,406		)	775			(41,631		)
	1,829,837			(44,020		)	1,785,817
Less: Treasury stock, at cost, 3,229 shares	(58,150		)	—			(58,150		)
Total stockholders’ equity	1,771,687			(44,020		)	1,727,667
Total liabilities and stockholders’ equity	$	3,097,270		$	2,138		$	3,099,408

REVISED ANNUAL CONSOLIDATED STATEMENTS OF INCOME

The following tables reconcile the Company’s fiscal 2015 and 2014 annual consolidated statements of income from the previously reported amounts to the revised amounts:

	Year Ended June 30, 2015									Year Ended June 30, 2014
	As Reported			Adjustment			As Revised			As Reported			Adjustment			As Revised
Net sales	$	2,688,515		$	(78,902	)	$	2,609,613		$	2,153,611		$	(45,789	)	$	2,107,822
Cost of sales	2,069,898			(23,140		)	2,046,758			1,586,418			(6,878		)	1,579,540
Gross profit	618,617			(55,762		)	562,855			567,193			(38,911		)	528,282
Selling, general and administrative expenses	348,517			(45,690		)	302,827			311,288			(31,778		)	279,510
Amortization of acquired intangibles	17,985			(139		)	17,846			15,600			(160		)	15,440
Tradename impairment	5,510			(5,510		)	—			—			6,399			6,399
Acquisition related expenses, restructuring and integration charges	8,860			(540		)	8,320			12,568			(2,381		)	10,187
Operating income	237,745			(3,883		)	233,862			227,737			(10,991		)	216,746
Interest and other financing expense, net	26,022			(49		)	25,973			24,691			(325		)	24,366
Other (income)/expense, net	4,689			—			4,689			(4,548		)	(232		)	(4,780		)
Gain on sale of business	(8,256		)	(1,413		)	(9,669		)	—			—			—
Income before income taxes and equity in earnings of equity-method investees	215,290			(2,421		)	212,869			207,594			(10,434		)	197,160
Provision for income taxes	47,883			652			48,535			70,099			(491		)	69,608
Equity in net loss of equity-method investees	(489		)	(139		)	(628		)	(3,985		)	(14		)	(3,999		)
Income from continuing operations	167,896			(2,934		)	164,962			141,480			(9,929		)	131,551
Loss from discontinued operations, net of tax	—			—			—			(1,629		)	—			(1,629		)
Net income	$	167,896		$	(2,934	)	$	164,962		$	139,851		$	(9,929	)	$	129,922
Basic net income (loss) per common share:
From continuing operations	$	1.65		$	(0.03	)	$	1.62		$	1.45		$	(0.10	)	$	1.35
From discontinued operations	—			—			—			(0.02		)	—			(0.02		)
Net income per common share - basic	$	1.65		$	(0.03	)	$	1.62		$	1.43		$	(0.10	)	$	1.33
Diluted net income (loss) per common share:
From continuing operations	$	1.62		$	(0.03	)	$	1.60		$	1.42		$	(0.10	)	$	1.32
From discontinued operations	—			—			—			(0.02		)	—			(0.02		)
Net income per common share - diluted	$	1.62		$	(0.03	)	$	1.60		$	1.40		$	(0.10	)	$	1.30
Shares used in the calculation of net income per common share:
Basic	101,703			101,703			101,703			97,750			97,750			97,750
Diluted	103,421			103,421			103,421			100,006			100,006			100,006

Net income/(loss) per common share may not add in certain periods due to rounding

REVISED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

The following table reconciles the Company’s fiscal 2015 and 2014 annual consolidated statements of comprehensive income (loss) from the previously reported amounts to the revised amounts:

	Fiscal Year Ended June 30, 2015									Fiscal Year Ended June 30, 2014
	As Reported			Adjustment			As Revised			As Reported			Adjustment			As Revised
Net income	$	167,896		$	(2,934	)	$	164,962		$	139,851		$	(9,929	)	$	129,922
Other comprehensive income (loss):
Foreign currency translation adjustments	(103,209		)	835			(102,374		)	90,625			148			90,773
Change in deferred gains (losses) on cash flow hedging instruments	1,581			—			1,581			(1,404		)	—			(1,404		)
Change in unrealized loss on available for sale investment	(906		)	—			(906		)	(1,842		)	—			(1,842		)
Total other comprehensive (loss) income	(102,534		)	835			(101,699		)	87,379			148			87,527
Total comprehensive income	$	65,362		$	(2,099	)	$	63,263		$	227,230		$	(9,781	)	$	217,449

REVISED CONSOLIDATED CASH FLOWS FROM OPERATIONS

The following table reconciles the Company’s fiscal 2015 and 2014 annual cash flows from operating activities from the previously reported amounts to the revised amounts:

	Fiscal Year Ended June 30, 2015									Fiscal Year Ended June 30, 2014
	As Reported			Adjustment			As Revised			As Reported			Adjustment			As Revised
Net income	$	167,896		$	(2,934	)	$	164,962		$	139,851		$	(9,929	)	$	129,922
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	56,587			793			57,380			48,040			182			48,222
Deferred income taxes	(11,603		)	8,936			(2,667		)	(1,350		)	(1,262		)	(2,612		)
Equity in net income of equity-method investees	(489		)	(139		)	(628		)	(3,985		)	(14		)	(3,999		)
Stock based compensation	12,197			—			12,197			12,448			—			12,448
Contingent consideration expense	280			(533		)	(253		)	(3,026		)	2,043			(983		)
Loss on sale of business	—			—			—			1,629			—			1,629
Gains on pre-existing ownership interests in HPPC and Empire	(8,256		)	(1,413		)	(9,669		)	—			—			—
Impairment charges	5,510			(5,510		)	—			—			7,504			7,504
Other non-cash items, net	(1,428		)	(6		)	(1,434		)	1,175			—			1,175
Increase (decrease) in cash attributable to changes in operating assets and liabilities, net
Accounts receivable	(31,846		)	12,264			(19,582		)	967			11,628			12,595
Inventories	(21,097		)	(9,368		)	(30,465		)	(22,775		)	(2,044		)	(24,819		)
Other current assets	7,699			(23,007		)	(15,308		)	(7,948		)	(8,055		)	(16,003		)
Other assets and liabilities	(3,964		)	—			(3,964		)	(5,540		)	4,997			(543		)
Accounts payable and accrued expenses	13,996			20,917			34,913			25,282			(5,050		)	20,232
Net cash provided by operating activities	$	185,482		$	—		$	185,482		$	184,768		$	—		$	184,768

There were no adjustments to cash balances and to cash flows from investing and financing activities for the fiscal years ended June 30, 2015 and 2014.

REVISED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

The following table reconciles the Company’s fiscal 2013, 2014 and 2015 annual consolidated statements of stockholders’ equity from the previously reported amounts to the revised amounts:

	Common Stock			Additional										Accumulated Other
		Amount		Paid-in			Retained			Treasury Stock				Comprehensive
	Shares	at $.01		Capital			Earnings			Shares	Amount			Income (Loss)			Total
Balance at June 30, 2013, as reported	98,044	$	980	$	768,284		$	489,767		2,672	$	(30,225	)	$	(27,251	)	$	1,201,555
Adjustment	—	—		—			(30,688		)	—	—			(208		)	(30,896		)
Balance at June 30, 2013, as revised	98,044	$	980	$	768,284		$	459,079		2,672	$	(30,225	)	$	(27,459	)	$	1,170,659
Balance at June 30, 2014, as reported	103,143	$	1,031	$	969,182		$	629,618		2,906	$	(40,092	)	$	60,128		$	1,619,867
Adjustment	—	—		1,635			(40,617		)	—	—			(60		)	(39,042		)
Balance at June 30, 2014, as revised	103,143	$	1,031	$	970,817		$	589,001		2,906	$	(40,092	)	$	60,068		$	1,580,825
Balance at June 30, 2015, as reported	105,841	$	1,058	$	1,073,671		$	797,514		3,229	$	(58,150	)	$	(42,406	)	$	1,771,687
Adjustment	—	—		(1,244		)	(43,551		)	—	—			775			(44,020		)
Balance at June 30, 2015, as revised	105,841	$	1,058	$	1,072,427		$	753,963		3,229	$	(58,150	)	$	(41,631	)	$	1,727,667

Note: The common stock and additional paid-in capital amounts and the treasury shares for the fiscal year ended June 30, 2014 have been retroactively adjusted to reflect a two-for-one stock split of the Company’s common stock in the form of a 100% stock dividend.

REVISED SEGMENT NET SALES AND OPERATING INCOME

The following table reconciles the Company’s fiscal 2015 and 2014 annual segment net sales and operating income data from the previously reported amounts to the revised amounts:

	Fiscal Year Ended June 30, 2015									Fiscal Year Ended June 30, 2014
	As Reported			Adjustment			As Revised			As Reported			Adjustment			As Revised
Net Sales:
United States	$	1,367,388		$	(41,392	)	$	1,325,996		$	1,282,175		$	(35,062	)	$	1,247,113
United Kingdom	735,996			(13,166		)	722,830			637,454			(8,626		)	628,828
Hain Pure Protein	358,582			(21,385		)	337,197			—			—			—
Rest of World	226,549			(2,959		)	223,590			233,982			(2,101		)	231,881
	$	2,688,515		$	(78,902	)	$	2,609,613		$	2,153,611		$	(45,789	)	$	2,107,822
Operating Income:
United States	$	199,901		$	(11,847	)	$	188,054		$	205,864		$	(4,801	)	$	201,063
United Kingdom	46,222			(1,237		)	44,985			52,661			(3,152		)	49,509
Hain Pure Protein	26,479			2,206			28,685			—			—			—
Rest of World	16,438			(1,228		)	15,210			16,931			(182		)	16,749
	$	289,040		$	(12,106	)	$	276,934		$	275,456		$	(8,135	)	$	267,321
Corporate and Other	(51,295		)	8,223			(43,072		)	(47,719		)	(2,856		)	(50,575		)
	$	237,745		$	(3,883	)	$	233,862		$	227,737		$	(10,991	)	$	216,746