EX-99.2 3 d284095dex992.htm RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES

Exhibit 99.2

Non-GAAP Financial Measures

In addition to net income (loss) determined in accordance with United States Generally Accepted Accounting Principles (GAAP), the Company uses certain non-GAAP financial measures, such as “EBITDAE” and “Adjusted EBITDAE,” in assessing its operating performance. The Company believes that these non-GAAP measures serve as appropriate measures to be used in evaluating the performance of its business.

The Company defines EBITDAE as net income (loss) excluding the impact of income taxes, interest expense, depreciation and amortization expense, employee stock ownership plan (“ESOP”) and share-based compensation expense, non-cash impairment losses, and net gains and losses from derivatives and investment portfolio. The Company defines Adjusted EBITDAE as EBITDAE excluding the impact of LIFO charge or credit. The Company believes that the use of the LIFO method of inventory valuation for coffee, tea and culinary products results in better matching of costs and revenues. EBITDAE and Adjusted EBITDAE as defined by the Company may not be comparable to similarly titled measures reported by other companies. The Company does not intend for non-GAAP financial measures to be considered in isolation or as a substitute for other measures prepared in accordance with GAAP.

Set forth below is a reconciliation of reported net loss to EBITDAE and Adjusted EBITDAE:

|  | Year Ended June 30, |
|  | 2009 |  |  | 2010 |  |  | 2011 |
|  | (In thousands) |
Net loss, as reported |  | $ | (33,270 | ) |  | $ | (23,953 | ) |  | $ | (54,317 | )
Income tax expense (benefit) |  |  | 14,283 |  |  |  | (2,529 | ) |  |  | (9,167 | )
Interest expense |  |  | 335 |  |  |  | 986 |  |  |  | 1,965 |
Depreciation and amortization expense |  |  | 18,292 |  |  |  | 26,778 |  |  |  | 31,758 |
ESOP and stock-based compensation expense |  |  | 5,452 |  |  |  | 4,784 |  |  |  | 3,825 |
Intangible assets impairment losses |  |  | — |  |  |  | — |  |  |  | 7,805 |
Investment portfolio losses (gains) |  |  | 8,248 |  |  |  | (10,169 | ) |  |  | (4,191 | )
EBITDAE |  | $ | 13,340 |  |  | $ | (4,103 | ) |  | $ | (22,322 | )
LIFO (credit) charge net of taxes of zero* |  |  | (13 | ) |  |  | 1,033 |  |  |  | 40,317 |
Adjusted EBITDAE |  | $ | 13,327 |  |  | $ | (3,070 | ) |  | $ | 17,995 |

* | LIFO (credit) charge had no impact on income tax (benefit) expense since the Company has recorded a 100% valuation allowance against deferred tax assets.

Set forth below is a reconciliation of reported net loss to EBITDAE and Adjusted EBITDAE (in thousands):

|  | Three Months Ended September 30, |
|  | 2010 |  |  | 2011 |
Net loss, as reported |  | $ | (9,873 | ) |  | $ | (7,584 | )
Income tax expense |  |  | 361 |  |  |  | 346 |
Interest expense |  |  | 402 |  |  |  | 575 |
Depreciation and amortization expense |  |  | 7,461 |  |  |  | 7,923 |
ESOP and share-based compensation expense |  |  | 1,078 |  |  |  | 790 |
Net loss (gain) from derivatives and investment portfolio |  |  | (1,897 | ) |  |  | 2,621 |
EBITDAE |  | $ | (2,468 | ) |  | $ | 4,671 |
LIFO charge, net of taxes of zero(1) (2) |  |  | 3,595 |  |  |  | 6,660 |
Adjusted EBITDAE |  | $ | 1,127 |  |  | $ | 11,331 |

(1) | LIFO charge had no impact on income tax benefit since the Company has recorded a 100% valuation allowance against deferred tax assets.

(2) | Actual valuation of inventory under the LIFO method is made only at the end of each fiscal year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations must necessarily be based on management’s estimates of expected fiscal year-end inventory levels and costs. Because these estimates are subject to many forces beyond management’s control, interim results are subject to the final fiscal year-end LIFO inventory valuation.