Carter’s, Inc. (NYSE:CRI), the largest branded marketer in the United States of apparel exclusively for babies and young children, today reported its third quarter 2010 results.

“We achieved good growth in sales in the third quarter; however, higher transportation expenses resulted in a slight decline in earnings,” said Michael D. Casey, Chairman and Chief Executive Officer. “While we expect to achieve a record level of sales and earnings in fiscal 2010 and expect continued growth in sales, we believe rising product costs, particularly historically high cotton prices, will negatively impact earnings in the fourth quarter and through 2011.”

Third Quarter of Fiscal 2010 compared to Third Quarter of Fiscal 2009

Consolidated net sales increased $36.4 million, or 7.6%, to $517.9 million. Net sales of the Company’s Carter’s brands increased $30.3 million, or 7.9%, to $412.3 million. Net sales of the Company’s OshKosh B’gosh brand increased $6.1 million, or 6.1%, to $105.6 million.

Carter’s wholesale sales increased $20.7 million, or 12.5%, to $186.4 million due to earlier demand for seasonal product and strong over-the-counter performance, primarily in the Company’s baby replenishment business. OshKosh wholesale sales increased $2.3 million, or 8.9%, to $27.7 million, largely due to timing of 2010 shipments.

Consolidated retail sales increased $17.0 million, or 8.0%, to $228.8 million. Carter’s retail segment sales increased $13.1 million, or 9.5%, to $150.8 million driven by incremental sales of $11.9 million generated by new store openings and eCommerce sales, and a comparable store sales increase of $2.0 million, or 1.4%. OshKosh retail segment sales increased $3.8 million, or 5.2%, to $77.9 million, driven by incremental sales of $5.4 million generated by new store openings and eCommerce sales, and a comparable store sales increase of $0.4 million, or 0.6%.

In the third quarter of fiscal 2010, the Company opened eight Carter’s and three OshKosh retail stores. The Company also closed one OshKosh retail store. As of the end of the third quarter, the Company operated 297 Carter’s and 177 OshKosh retail stores.

The Company’s mass channel sales, which are comprised of sales of its Child of Mine brand to Walmart and Just One You (formerly Just One Year) brand to Target, decreased $3.5 million, or 4.5%, to $75.1 million. This decrease reflects lower Child of Mine brand sales largely due to merchandising assortment changes and the timing of shipments, and increased Just One You brand sales driven by the addition of new programs and improved product performance.

Operating income in the third quarter of fiscal 2010 was $79.9 million, a decrease of $1.1 million, or 1.4%, from $81.0 million in the third quarter of fiscal 2009, primarily due to higher supply chain costs and lower earnings from sales of our Child of Mine brand.

Net income increased $0.3 million, or 0.5%, to $49.7 million, or $0.83 per diluted share, compared to $49.4 million, or $0.84 per diluted share, in the third quarter of fiscal 2009.

First Nine Months of Fiscal 2010 compared to First Nine Months of Fiscal 2009

Consolidated net sales increased $89.0 million, or 7.6%, to $1.3 billion. Net sales of the Company’s Carter’s brands increased $81.3 million, or 8.8%, to $1.0 billion. Net sales of the Company’s OshKosh B’gosh brand increased $7.7 million, or 3.2%, to $245.7 million.

Carter’s wholesale sales increased $48.4 million, or 12.2%, to $443.9 million due to strong over-the-counter performance. OshKosh wholesale sales increased $0.8 million, or 1.3%, to $60.7 million.

Consolidated retail sales increased $39.8 million, or 7.5%, to $567.6 million. Carter’s retail segment sales increased $32.8 million, or 9.4%, to $382.6 million, driven by incremental sales of $28.6 million generated by new store openings and eCommerce sales, and a comparable store sales increase of $5.5 million, or 1.6%. OshKosh retail segment sales increased $7.0 million, or 3.9%, to $185.1 million, driven by incremental sales of $10.3 million generated by new store openings and eCommerce sales, partially offset by a comparable store sales decline of $0.2 million, or 0.2%. In the first nine months of fiscal 2010, the Company opened 21 Carter’s and eight OshKosh retail stores. In addition, the Company closed one OshKosh retail store.

The Company’s mass channel sales increased $0.1 million, or 0.1%, to $181.8 million. This increase was driven by increased sales of the Company’s Just One You brand resulting from the addition of new programs and improved product performance, and was largely offset by decreased sales of the Company’s Child of Mine brand attributable to merchandising assortment changes made by Walmart and a related reduction in floor space.

Results for the first nine months of fiscal 2009 included pre-tax charges of approximately $11.6 million related to severance and other benefits, asset impairment, accelerated depreciation, and other closure costs, incurred in connection with the workforce reduction and distribution facility closure that occurred during the first half of fiscal 2009. Results for the first nine months of fiscal 2009 also included a $0.7 million write-down in the second quarter of the carrying value of the White House, Tennessee distribution facility which was sold during the third quarter of fiscal 2009.

Operating income in the first nine months of fiscal 2010 was $184.5 million, an increase of $45.2 million, or 32.5%, from $139.3 million in the first nine months of fiscal 2009. Excluding the effect of the workforce reduction, distribution facility closure, asset impairment charges, and facility write-down, adjusted operating income increased $32.8 million, or 21.7%, to $184.5 million from $151.6 million in the first nine months of fiscal 2009.

Net income increased $28.9 million, or 35.0%, to $111.6 million, or $1.86 per diluted share, compared to $82.6 million, or $1.41 per diluted share, in the first nine months of fiscal 2009. Excluding the effect of the workforce reduction, distribution facility closure, asset impairment charges, and facility write-down, adjusted net income increased $21.1 million, or 23.4%, to $111.6 million, or $1.86 per diluted share, compared to $90.4 million, or $1.54 per adjusted diluted share in the first nine months of fiscal 2009.

A reconciliation of income as reported under accounting principles generally accepted in the United States of America ("GAAP") to income adjusted for certain items is provided at the end of this release.

Cash flow from operations in the first nine months of fiscal 2010 was $5.2 million, a decrease of $55.9 million, or 91.5%, over the first nine months of fiscal 2009 primarily due to net changes in working capital, partially offset by increased earnings.

Stock Repurchase Program

On June 15, 2010, the Company’s Board of Directors authorized the Company to repurchase up to $100 million of its outstanding common shares (in addition to $8.9 million available for repurchases under the Company’s repurchase authorization approved in February 2007). Neither of these share repurchase authorizations have expiration dates. Purchases may be made in the open market or in privately negotiated transactions, with the level and timing of activity at the discretion of the Company’s management depending on market conditions, stock price, other investment priorities, and other factors.

During the third quarter, the Company repurchased 1,837,450 shares of its common stock for approximately $44.1 million at an average price of $24.00 per share. Subsequent to the third quarter, the Company repurchased an additional 221,380 shares of its common stock for approximately $5.9 million at an average price of $26.70 per share, which brought the year-to-date total through October 19, 2010 to approximately $50 million.

All repurchases were executed pursuant to a trading plan that meets the safe harbor requirements of Rule 10b5-1 of the Securities Act of 1933.

New Credit Facility

On October 15, 2010, the Company entered into a new $375 million ($130 million sub-limit for letters of credit) revolving credit facility (the “Revolver”) with Bank of America, N.A., as sole lead arranger and administrative agent, JP Morgan Chase, and certain other financial institutions. The Revolver was immediately drawn upon to pay off the Company’s existing term loan of $232.2 million and pay transaction fees and expenses of approximately $3.8 million, leaving approximately $130 million available under the Revolver for future borrowings (net of letters of credit of approximately $8.6 million). In connection with the pay off of the term loan, the Company expects to expense approximately $1.2 million in unamortized debt issuance costs in the fourth quarter.

2010 Business Outlook

The Company projects net sales for the fourth quarter to be up in the mid to high teens and adjusted diluted earnings per share for the fourth quarter to be down low teens to high single digits, as compared to the fourth quarter of 2009.

For the year, net sales are expected to be up approximately 10%, with diluted earnings per share up 12% to 14% over 2009 adjusted diluted earnings per share of $2.15.

A reconciliation of income as reported under GAAP to income adjusted for certain items is provided at the end of this release.

First Half 2011 Outlook/Fiscal 2011 Operating Margin

The Company expects first half 2011 sales to increase approximately 10% as compared to the first half of 2010. The Company expects that product costs relating to its Spring 2011 merchandise assortment will rise by approximately 11%. Although product costs for the Company’s Fall 2011 merchandise assortment are still being negotiated, the Company expects costs will be significantly higher than the costs negotiated for the Spring 2011 assortment. As a result, the Company projects that its consolidated operating margin in fiscal 2011 could decline substantially.

Conference Call

The Company will hold a conference call with investors to discuss third quarter results on October 28, 2010 at 8:30 a.m. Eastern Time. To participate in the call, please dial 913-227-1353. To listen to a live broadcast of the call on the internet, please log on to www.carters.com and select the “Q3 2010 Earnings Conference Call” link under the “Investor Relations” tab. The conference call will be simultaneously broadcast on the Company’s website at www.carters.com. Presentation materials for the call can be accessed on the Company’s website at www.carters.com by selecting the “Conference Calls & Webcasts” link under the “Investor Relations” tab. A replay of the call will be available shortly after the broadcast through November 6, 2010, at 719-457-0820, passcode 6368984. The replay will be archived on the Company’s website at the same location.

For more information on Carter’s, Inc., please visit www.carters.com.

Cautionary Language

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 relating to the Company’s future performance, including, without limitation, statements with respect to the Company’s anticipated financial results for the fourth quarter of fiscal 2010, fiscal 2010, the first half of fiscal 2011, and fiscal 2011, or any other future period, assessment of the Company’s performance and financial position, and drivers of the Company’s sales and earnings growth. Such statements are based on current expectations only, and are subject to certain risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated, or projected. Factors that could cause actual results to materially differ include: a decrease in sales to, or the loss of one or more of, the Company’s key customers; increased competition in the baby and young children’s apparel market; the acceptance of the Company’s products in the marketplace; deflationary pricing pressures; increases in supply chain costs, such as cotton, labor, and transportation costs, which may adversely affect net sales, costs of goods sold, and other items; the Company’s dependence on foreign supply sources; failure of foreign supply sources to meet the Company’s quality standards or regulatory requirements; negative publicity; leverage, which increases the Company’s exposure to interest rate risk and could require the Company to dedicate a substantial portion of its cash flow to repay debt principal; an inability to access suitable financing due to the current economic environment; a continued decrease in the overall value of the United States equity markets due to the current economic environment; a continued decrease in the overall level of consumer spending; changes in consumer preference and fashion trends; seasonal fluctuations in the children’s apparel business; the impact of governmental regulations and environmental risks applicable to the Company’s business; the risk that ongoing litigation and investigations may be resolved adversely; the breach of the Company’s consumer databases; the ability of the Company to adequately forecast demand, which could create significant levels of excess inventory; the ability of the Company to identify new retail store locations, and negotiate appropriate lease terms for the retail stores; the ability to attract and retain key individuals within the organization; failure to achieve sales growth plans, cost savings, and other assumptions that support the carrying value of the Company’s intangible assets; and the Company’s inability to remediate its material weaknesses in internal control over financial reporting. Many of these risks are further described in the most recently filed Quarterly Report on Form 10-Q and other reports filed with the Securities and Exchange Commission under the headings “Risk Factors” and “Forward-Looking Statements.” The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
         

CARTER’S, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in thousands, except for share data)

(unaudited)
 

Three-month periods ended
Nine-month periods ended
October 2,

2010
  October 3,

2009
October 2,

2010
  October 3,

2009

Net sales:
Carter’s:
Wholesale $ 186,396 $ 165,672 $ 443,902 $ 395,550
Retail 150,838 137,708 382,570 349,765
Mass Channel   75,050     78,584     181,808     181,690  
Carter’s net sales   412,284     381,964     1,008,280     927,005  
OshKosh:
Retail 77,946 74,103 185,050 178,091
Wholesale   27,698     25,439     60,656     59,901  
OshKosh net sales   105,644     99,542     245,706     237,992  
Total net sales 517,928 481,506 1,253,986 1,164,997
Cost of goods sold   325,125     295,942     764,122     727,001  
Gross profit 192,803 185,564 489,864 437,996
Selling, general, and administrative expenses 123,321 115,225 333,084 314,198
Workforce reduction and facility write-down and closure costs -- -- -- 11,400
Royalty income   (10,396 )   (10,637 )   (27,690 )   (26,871 )
Operating income 79,878 80,976 184,470 139,269
Interest expense, net   1,568     2,688     6,674     8,571  
Income before income taxes 78,310 78,288 177,796 130,698
Provision for income taxes   28,653     28,882     66,218     48,054  
Net income $ 49,657   $ 49,406   $ 111,578   $ 82,644  
 
Basic net income per common share $ 0.84 $ 0.86 $ 1.89 $ 1.45
 
Diluted net income per common share $ 0.83 $ 0.84 $ 1.86 $ 1.41
 
     

CARTER’S, INC.

BUSINESS SEGMENT RESULTS

(unaudited)
 
For the three-month periods ended For the nine-month periods ended
(dollars in thousands) October 2,

2010
  % of

Total
  October 3,

2009
  % of

Total
October 2,

2010
  % of

Total
  October 3,

2009
  % of

Total
Net sales:
 
Carter’s:
Wholesale $ 186,396 36.0 % $ 165,672 34.4 % $ 443,902 35.4 % $ 395,550 34.0 %
Retail (a) 150,838 29.1 % 137,708 28.6 % 382,570 30.5 % 349,765 30.0 %
Mass Channel   75,050   14.5 %   78,584   16.3 %   181,808   14.5 %   181,690   15.6 %
Carter’s total net sales   412,284   79.6 %   381,964   79.3 %   1,008,280   80.4 %   927,005   79.6 %
 
OshKosh:
Retail (a) 77,946 15.0 % 74,103 15.4 % 185,050 14.8 % 178,091 15.3 %
Wholesale   27,698   5.4 %   25,439   5.3 %   60,656   4.8 %   59,901   5.1 %
OshKosh total net sales   105,644   20.4 %   99,542   20.7 %   245,706   19.6 %   237,992   20.4 %
 
Total net sales $ 517,928   100.0 % $ 481,506   100.0 % $ 1,253,986   100.0 % $ 1,164,997   100.0 %
 
Operating income (loss): % of

segment

net sales
% of

segment

net sales
% of

segment

net sales
% of

segment

net sales
 
Carter’s:
Wholesale $ 39,843 21.4 % $ 37,698 22.8 % $ 103,482 23.3 % $ 81,122 20.5 %
Retail (a) 31,579 20.9 % 31,381 22.8 % 76,405 20.0 % 64,544 18.5 %
Mass Channel   8,356   11.1 %   13,738   17.5 %   28,006   15.4 %   30,557   16.8 %
 
Carter’s operating income   79,778   19.4 %   82,817   21.7 %   207,893   20.6 %   176,223   19.0 %
 
OshKosh:
Retail (a) 9,420 12.1 % 10,765 14.5 % 10,475 5.7 % 11,220 6.3 %
Wholesale 4,955 17.9 % 4,124 16.2 % 6,185 10.2 % 3,607 6.0 %
Mass Channel (b)   764   --   709   --   2,003   --   1,853   --
 
OshKosh operating income   15,139   14.3 %   15,598   15.7 %   18,663   7.6 %   16,680   7.0 %
 
Segment operating income 94,917 18.3 % 98,415 20.4 % 226,556 18.1 % 192,903 16.6 %
 
Corporate expenses (c) (15,039 ) (2.9 %) (17,439 ) (3.6 %) (42,086 ) (3.4 %) (41,269 ) (3.5 %)
Workforce reduction and facility

write-down and closure costs (d)
  --   --   --   --   --   --   (12,365 ) (1.1 %)
-- --
Net corporate expenses   (15,039 ) (2.9 %)   (17,439 ) (3.6 %)   (42,086 ) (3.4 %)   (53,634 ) (4.6 %)
 
Total operating income $ 79,878   15.4 % $ 80,976   16.8 % $ 184,470   14.7 % $ 139,269   12.0 %
 
(a) Includes eCommerce results.

(b) OshKosh mass channel consists of a licensing agreement with Target Stores. Operating income consists of royalty income, net of related expenses.

(c) Corporate expenses generally include expenses related to incentive compensation, stock-based compensation, executive management, severance and relocation, finance, building occupancy, information technology, certain legal fees, consulting, and audit fees.
(d) Includes closure costs associated with our Barnesville, Georgia distribution facility and our Oshkosh, Wisconsin facility, write-down of the White House, Tennessee facility, and severance and other benefits related to the corporate workforce reduction.
       

CARTER’S, INC.

CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except for share data)

(unaudited)
 

October 2,

2010

January 2,

2010

October 3,

2009
ASSETS
Current assets:
Cash and cash equivalents $ 182,329 $ 335,041 $ 214,339
Accounts receivable, net 171,501 82,094 127,879
Finished goods inventories, net 263,782 214,000 223,510
Prepaid expenses and other current assets 12,369 11,114 11,845
Deferred income taxes   25,701     33,419     32,005  
 
Total current assets 655,682 675,668 609,578
Property, plant, and equipment, net 92,558 86,077 84,430
Tradenames 305,733 305,733 305,733
Goodwill 136,570 136,570 136,570
Deferred debt issuance costs, net 1,237 2,469 2,750
Licensing agreements, net -- 1,777 2,597
Other assets   305     305     405  
Total assets $ 1,192,085   $ 1,208,599   $ 1,142,063  
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
Current liabilities:
Current maturities of long-term debt $ 2,450 $ 3,503 $ 3,503
Accounts payable 94,440 97,546 68,009
Other current liabilities   62,502     69,568     69,808  
 
Total current liabilities 159,392 170,617 141,320
Long-term debt 229,709 331,020 331,896
Deferred income taxes 109,855 110,676 106,646
Other long-term liabilities   45,626     40,262     43,628  
Total liabilities   544,582     652,575     623,490  
 
Commitments and contingencies
Stockholders’ equity:
Preferred stock; par value $.01 per share; 100,000 shares authorized; none issued or outstanding at October 2, 2010, January 2, 2010, and October 3, 2009 -- -- --
Common stock, voting; par value $.01 per share; 150,000,000 shares authorized, 57,696,317, 58,081,822, and 58,037,018 shares issued and outstanding at October 2, 2010, January 2, 2010, and October 3, 2009, respectively 577 581 580
Additional paid-in capital 214,547 235,330 233,565
Accumulated other comprehensive loss (3,378 ) (4,066 ) (6,755 )
Retained earnings   435,757     324,179     291,183  
 
Total stockholders’ equity   647,503     556,024     518,573  
 
Total liabilities and stockholders’ equity $ 1,192,085   $ 1,208,599   $ 1,142,063  
 
   

CARTER’S, INC.

CONSOLIDATED STATEMENTS OF CASH FLOW

(dollars in thousands)

(unaudited)
 
For the nine-month periods ended
October 2,

2010
  October 3,

2009
Cash flows from operating activities:
Net income $ 111,578 $ 82,644
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 22,730 24,396
Amortization of debt issuance costs 1,232 848
Non-cash stock-based compensation expense 5,397 5,200
Income tax benefit from exercised stock options (8,973 ) (11,374 )
Non-cash asset impairment and facility write-down charges -- 3,662
(Gain) loss on sale of property, plant, and equipment (3 ) 96
Deferred income taxes 6,974 1,310
Effect of changes in operating assets and liabilities:
Accounts receivable (89,407 ) (42,427 )
Inventories (49,782 ) (20,024 )
Prepaid expenses and other assets (1,255 ) (1,876 )
Accounts payable and other liabilities   6,710    

18,679
 
Net cash provided by operating activities   5,201    

61,134
 
 
Cash flows from investing activities:
Capital expenditures (29,483 )

(25,783
)
Proceeds from sale of property, plant, and equipment   286    

2,805
 
Net cash used in investing activities   (29,197 )  

(22,978
)
 
Cash flows from financing activities:
Payments on term loan (102,364 ) (2,627 )
Repurchases of common stock (44,090 ) --
Income tax benefit from exercised stock options 8,973 11,374
Proceeds from exercise of stock options   8,765     5,087  
Net cash (used in) provided by financing activities   (128,716 )   13,834  
 
Net (decrease) increase in cash and cash equivalents (152,712 ) 51,990
Cash and cash equivalents, beginning of period   335,041     162,349  
 
Cash and cash equivalents, end of period $ 182,329   $ 214,339  
 
 

CARTER’S, INC.

RECONCILIATION OF GAAP TO ADJUSTED RESULTS
    Nine-month period ended

October 3, 2009
   
Operating

Income
Net

Income
Diluted

EPS
(dollars in millions, except earnings per share)
 
Income, as reported (GAAP) $ 139.3 $ 82.6 $ 1.41
 
Workforce reduction (a) 5.5 3.5 0.06
Distribution facility closure costs (b) 3.3 2.1 0.04
Asset impairment charges (c) 1.8 1.1 0.01
Accelerated depreciation (d) 1.0 0.6 0.01
Facility write-down (e)   0.7   0.5  

0.01
 
Income, as adjusted (f) $ 151.6 $ 90.4 $ 1.54
 
 
(a) Severance charges and other benefits associated with the reduction in the Company’s corporate workforce.
 
 
(b) Costs associated with the closure of the Company’s Barnesville, Georgia distribution facility.
 
 
(c) Asset impairment charges associated with the closure of the Company’s Oshkosh, Wisconsin facility.
 
 

(d) Accelerated depreciation charges (included in selling, general, and administrative expenses) related to the closure of the Company’s Barnesville, Georgia distribution facility.
 
 
(e) Charge related to the write-down of the carrying value of the White House, Tennessee distribution facility.
 
 
(f) In addition to the results provided in this earnings release in accordance with GAAP, the Company has provided adjusted, non-GAAP financial measurements that present operating income, net income, and net income on a diluted share basis excluding the adjustments discussed above. These adjustments, which the Company does not believe to be indicative of on-going business trends, are excluded from these calculations. The Company believes these adjustments provide a meaningful comparison of the Company’s results. The adjusted, non-GAAP financial measurements included in this earnings release should not be considered as an alternative to net income or as any other measurement of performance derived in accordance with GAAP. The adjusted, non-GAAP financial measurements are presented for informational purposes only and are not necessarily indicative of the Company’s future condition or results of operations.
 
 
 
 
 
 
 
 
 
 
 
CARTER’S, INC.

RECONCILIATION OF GAAP TO ADJUSTED RESULTS
           
Three-month period ended

January 2, 2010
Twelve-month period ended

January 2, 2010
 
(dollars in millions, except earnings per share)
 
Operating Net Diluted Operating Net Diluted
Income Income EPS Income Income EPS
 
Income, as reported (GAAP) $ 56.3 $ 33.0 $ 0.56 $ 195.6 $ 115.6 $ 1.97
 
Workforce reduction (a) -- -- -- 5.5 3.5 0.06
 
Distribution facility closure costs (b) -- -- -- 3.3 2.1 0.04
 
Net asset impairment (c) (0.6 ) (0.4 ) (0.01 ) 1.2 0.8 0.01
 
Accelerated depreciation (d) -- -- -- 1.0 0.6 0.01
 
Investigation expenses (e) 5.7 3.6 0.06 5.7 3.6 0.06
 
Facility write-down (f)   --     --     --     0.7   0.4   --
 
Income, as adjusted (g) $ 61.4   $ 36.2   $ 0.61   $ 213.0 $ 126.6 $ 2.15
 
 
(a) Severance charges and other benefits associated with the reduction in the Company’s corporate workforce.
 
(b) Costs associated with the closure of the Company’s Barnesville, Georgia distribution facility.
 
(c) Asset impairment charges associated with the closure and sale of the Company’s Oshkosh, Wisconsin facility, net of the gain from the sale of this facility.
 
 
(d) Accelerated depreciation charges (included in selling, general, and administrative expenses) related to the closure of the Company’s Barnesville, Georgia distribution facility.
 
 
(e) Professional service fees related to the investigation of customer accommodations.
 
(f) Charges related to the write-down of the carrying value of the Company’s White House, Tennessee distribution facility.
 
(g) In addition to the results provided in this earnings release in accordance with GAAP, the Company has provided adjusted, non-GAAP financial measurements that present operating income, net income, and net income on a diluted share basis excluding the adjustments discussed above. These adjustments, which the Company does not believe to be indicative of on- going business trends, are excluded from these calculations. The Company believes these adjustments provide a meaningful comparison of the Company’s results. The adjusted, non-GAAP financial measurements included in this earnings release should not be considered as an alternative to net income or as any other measurement of performance derived in accordance with GAAP. The adjusted, non-GAAP financial measurements are presented for informational purposes only and are not necessarily indicative of the Company’s future condition or results of operations.
 
 
 
 
 
 
 
 

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