Financial Instruments Measured At Fair Value

6 Months Ended

Dec. 31, 2024

Fair Value Disclosures [Abstract]

Financial Instruments Measured At Fair Value

13.FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE

The Company’s financial assets and liabilities measured at fair value are required to be grouped in one of three levels. The levels prioritize the inputs used to measure the fair value of the assets or liabilities. These levels are:

•Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

•Level 2 – Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

•Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

The following table presents assets and liabilities measured at fair value on a recurring basis as of December 31, 2024:

	Total		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets:
Derivative financial instruments	$	9,968	$	—	$	9,968	$	—
Liabilities:
Derivative financial instruments	$	928	$	—	$	928	$	—

The following table presents assets and liabilities measured at fair value on a recurring basis as of June 30, 2024:

	Total		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets:
Derivative financial instruments	$	14,982	$	—	$	14,982	$	—
Liabilities:
Derivative financial instruments	$	3,333	$	—	$	3,333	$	—

There were no transfers of financial instruments between the three levels of fair value hierarchy during the six months ended December 31, 2024 or 2023.

Derivative Instruments

The Company uses interest rate swaps to manage interest rate risk and cross-currency swaps and foreign currency exchange contracts to manage exposure to currency fluctuations. These instruments are valued using techniques like DCF analysis, which considers the contractual terms and market-based inputs such as interest rate curves and implied volatilities. The fair values of interest rate swaps are determined by netting the discounted future fixed and variable cash flows. The variable cash flows are based on expected future interest rates.

Credit valuation adjustments are made to reflect the nonperformance risk of both the Company and its counterparties. Most inputs used to value derivatives fall within Level 2 of the fair value hierarchy, but credit valuation adjustments use Level 3 inputs, such as current credit spreads. The impact of these adjustments was not significant to the overall valuation, so all derivatives as of December 31, 2024 and June 30, 2024 were classified as Level 2.

Nonrecurring Fair Value Measurements

The Company measures certain non-financial assets, such as goodwill, intangible assets, property and equipment, and right-of-use lease assets, at fair value on a nonrecurring basis. These assets are initially measured at fair value at the time of acquisition or purchase, with adjustments only for foreign currency translation. Periodically, these assets are tested for impairment by comparing their carrying values to their estimated fair values. If an asset is impaired, the Company recognizes an impairment expense equal to the excess of the carrying value over the estimated fair value.

For indefinite-lived intangible assets, the fair value is determined using the relief from royalty approach, considering factors like future growth, royalty rates, discount rates, and other variables. Fair value measurements for reporting units are estimated using a blended analysis of the DCF income approach and GPCM market approach, which involve significant management judgment and Level 3 inputs, such as economic conditions and customer demand. These measurements are performed at least annually for impairment testing. The Company bases its fair value estimates on reasonable assumptions but acknowledges their unpredictability and inherent uncertainty.

During the three and six months ended, December 31, 2024, the Company recorded a non-cash impairment charge of $91,267 related to U.S. reporting unit goodwill as discussed in Note 8, Goodwill and Other Intangible Assets. As of December 31, 2024, such goodwill was classified as a Level 3 asset measured at fair value on a nonrecurring basis with an estimated fair value of $800,000.

During the three and six months ended December 31, 2024, the Company recorded non-cash impairment charges of $17,986 for personal care intangible assets and associated property, plant and equipment as discussed in Note 6, Property and Equipment, Net, and Note 8, Goodwill and Other Intangible Assets. As of December 31, 2024, such intangible assets and property, plant and equipment were classified as Level 3 assets measured at fair value on a nonrecurring basis with estimated fair values of nil.

During the three and six months ended December 31, 2023, the Company recognized a non-cash impairment charge of $20,666 related to an asset group in the North America reportable segment, as discussed in Note 6, Property, Plant and Equipment, Net. The asset group was primarily comprised of property, plant and equipment and fair value was determined using a DCF analysis. As of December 31, 2023, the asset group’s property, plant and equipment were classified as Level 3 assets measured at fair value on a nonrecurring basis.