Diamond Reports Financial Results For First Quarter Of Fiscal 2013

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Financial Summary
Net Sales by Product Line:
	Three months ended
	October 31,
(in thousands)	2012	2011	% Prior Year
Snack	$154,057	$157,122	(2.0%)
Culinary/Domestic In-shell	90,723	98,112	(7.5%)
Total retail	244,780	255,234	(4.1%)
International non-retail	8,067	21,444	(62.4%)
N. American Ingredient/Food Service and Other	5,615	10,715	(47.6%)
Total non-retail	13,682	32,159	(57.5%)
Total	$258,462	$287,393	(10.1%)
Summarized Statement of Operations:
	Three months ended
	October 31,
(in thousands, except per share amounts)	2012	2011
Net sales	$258,462	$287,393
Cost of sales	199,916	226,086
Gross profit	58,546	61,307
Operating expenses:
Selling, general and administrative	38,181	29,455
Advertising	9,045	12,716
Acquisition and integration related expenses	--	17,214
Loss on warrant liability	7,516	--
Total operating expenses	54,742	59,385
Income from operations	3,804	1,922
Interest expense, net	13,912	5,761
Loss before income taxes	(10,108)	(3,839)
Income taxes (benefit)	621	(14,640)
Net income (loss)	$ (10,729)	$10,801
Earnings (loss) per share (EPS):
Basic	$ (0.49)	$0.49
Diluted	$ (0.49)	$0.47
Shares used to compute EPS:
Basic	21,753	21,668
Diluted	21,753	22,567
Summarized Balance Sheet Data:
	October 31,
(in thousands)	2012	2011
Cash and cash equivalents	$9,852	$4,474
Trade receivables, net	113,540	141,760
Inventories	231,979	254,860
Current assets	376,011	463,161
Property plant and equipment, net	143,752	146,417
Other intangible assets, net	438,458	446,267
Goodwill	407,196	406,850
Current liabilities	307,473	372,072
Total debt	613,113	576,778
Stockholders' equity	322,143	425,321

Non-GAAP Financial Information
Reconciliation of income (loss) before income taxes to non-GAAP EPS:
	Three months ended
	October 31,
(in thousands, except per share amounts)	2012	2011
GAAP income (loss) before income taxes	$ (10,108)	$ (3,839)
Loss on warrant liability	7,516	--
Retention stock-based compensation	357	--
Reduction of liability due to lease assignment	(1,319)	--
Adjustment to remove costs associated with acquisitions and integrations	--	17,214
Adjustment to exclude certain SG&A costs (1)	11,784	2,016
Non-GAAP income before income taxes	8,230	15,391
GAAP income taxes (benefit)	621	(14,640)
Tax effect of Non-GAAP adjustments	2,391	13,686
Non-GAAP income taxes (benefit)	3,012	(954)
Non-GAAP net income	$5,218	$16,345
Non-GAAP EPS-diluted	$0.24	$0.71
Shares used in computing Non-GAAP EPS-diluted	22,091	22,932
(1)  Related primarily to audit committee investigation, restatement- related expenses, consulting fees, retention, and severance.
Reconciliation of US GAAP net income (loss) to Adjusted EBITDA:
	Three months ended
	October 31,
(in thousands)	2012	2011
Net income (loss)	$ (10,729)	$10,801
Income taxes (benefit)	621	(14,640)
Loss before income taxes	(10,108)	(3,839)
Interest expense, net	13,912	5,761
Income from operations (EBIT)	3,804	1,922
Costs associated with acquisitions and integrations	--	17,214
Reduction of liability due to lease assignment	(1,319)	--
Loss on warrant liability	7,516	--
Certain selling, general and administrative costs (1)	11,784	2,016
Stock-based compensation expense	1,250	1,902
Depreciation and amortization	7,967	6,743
Adjusted EBITDA	$31,002	$29,797
(1)  Related primarily to audit committee investigation, restatement-related expenses, consulting fees, retention, and severance.

About Diamond's non-GAAP Financial Measures

This release contains non-GAAP financial measures of Diamond's performance ("non-GAAP measures") for different periods. Non-GAAP financial measures should not be considered as a substitute for financial measures prepared in accordance with GAAP.  Diamond's non-GAAP financial measures do not reflect a comprehensive system of accounting, and differ both from GAAP financial measures and from non-GAAP financial measures used by other companies. Diamond urges investors to review its reconciliation of non-GAAP financial measures to GAAP financial measures, and its financial statements to evaluate its business.

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