Diamond Reports Financial Results For First Quarter Of Fiscal 2013

• Net sales in the fiscal 2013 first quarter were $258.5 million, a decrease of 10.1% from the prior year.
• Gross margin was 22.7 percent in the fiscal 2013 first quarter, compared to 21.3 percent in the first quarter of fiscal 2012.
• GAAP net loss in the fiscal 2013 first quarter was $10.7 million, compared to net income of $10.8 million in the first quarter of fiscal 2012.
• Adjusted EBITDA in the first quarter fiscal 2013 was $31.0 million, compared to $29.8 million in the first quarter fiscal 2012.

SAN FRANCISCO, Dec. 17, 2012 (GLOBE NEWSWIRE) -- Diamond Foods, Inc. (Nasdaq:DMND) ("Diamond") today reported financial results for its fiscal 2013 first quarter.

In the first quarter of fiscal 2013, Diamond's GAAP net loss was $10.7 million and GAAP diluted net loss per share was $0.49. Diamond incurred selling, general and administrative ("SG&A") charges of $11.8 million primarily for audit committee investigation, restatement-related expenses, consulting fees, retention, and severance. The Company also incurred a $7.5 million charge related to a change in the fair value of the Oaktree warrant liability. Excluding these charges, Diamond's non-GAAP net income declined 68.0 percent from the first quarter of fiscal 2012 to $5.2 million, and non-GAAP diluted earnings per share declined 66.2 percent from the first quarter of fiscal 2012 to $0.24.

"Our first quarter results reflect some progress against our new brand strategies, but we continue to face headwinds with respect to walnut supply and a highly leveraged balance sheet," said Diamond's Chief Executive Officer Brian J. Driscoll. "Reduced promotional spending on our snack brands and a shift in the timing of advertising spending to later in the year were the largest contributors to improvement in our margins in the first quarter."

Financial Review

Net sales during the quarter decreased by 10.1 percent to $258.5 million compared to the same quarter of the prior year. Total retail net sales declined 4.1 percent to $244.8 million and snack net sales declined 2.0 percent year over year to $154.1 million in the quarter, driven by declines in Emerald and to a lesser extent, Kettle, offset by an increase in Pop Secret sales. Non-retail net sales totaled $13.7 million for the quarter compared to $32.2 million in the first quarter of fiscal 2012. The decrease in non-retail sales was mainly due to a lower supply of walnuts.

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