EX-99.2 3 a33272exv99w2.htm EXHIBIT 99.2 Exhibit 99.2
 

EXHIBIT 99.2
GAAP to Non-GAAP Reconciliations
In addition to the non-GAAP disclosures contained in the Company’s second quarter earnings press release for the quarter ended August 4, 2007, the Company also provided certain additional non-GAAP disclosures during its second quarter earnings conference call. Provided in the tables below is a reconciliation of the relevant GAAP measure to the non-GAAP disclosure referred to in the press release and/or during the conference call. Only line items affected by these non-GAAP adjustments are included in the tables below. All amounts are expressed in millions of dollars, except earnings per share. Non-GAAP earnings are derived by starting with the GAAP number on the left and subtracting the relevant non-GAAP adjustments while moving to the right by line item.
Reconciliation of fiscal 2007 second quarter GAAP earnings to non-GAAP earnings:
Non-GAAP earnings for the second quarter of fiscal 2007 exclude the income statement impact from the 74 demo store closures and the One Thousand Steps store asset impairment charges.
                                 
                    Non-GAAP        
                    Adjustments        
                    Attributable to        
            Non-GAAP     One Thousand        
            Adjustments     Steps Store Asset        
    GAAP     Attributable to 74     Impairment     Non-GAAP  
    Amounts     demo Store Closures     Charges     Amounts  
Net Sales
   $ 344.2     $ 2.1       —     $ 342.1  
Gross Margin/(Loss)
     91.0       (14.9 )     —       105.9  
SG&A
     109.6       1.4       9.9       98.3  
Operating (Loss)/Income
     (18.6 )     (16.3 )     (9.9 )     7.6  
Income Tax (Benefit)/Expense
     (7.5 )     (6.8 )     (4.1 )     3.4  
Net (Loss)/Income
   $ (10.5 )     (9.5 )     (5.8 )     4.8  
(Loss)/Earnings Per Share
   $ (0.15 )   $ (0.14 )   $ (0.08 )   $ 0.07  

 

 

Reconciliation of fiscal 2007 first half GAAP earnings to non-GAAP earnings:
Non-GAAP earnings for the first half of fiscal 2007 exclude the income statement impact from the 74 demo store closures and the One Thousand Steps store asset impairment charges.
                                 
                    Non-GAAP        
                    Adjustments        
                    Attributable to        
            Non-GAAP     One Thousand        
            Adjustments     Steps Store Asset        
    GAAP     Attributable to 74     Impairment     Non-GAAP  
    Amounts     demo Store Closures     Charges     Amounts  
Net Sales
   $ 664.8     $ 13.3       —     $ 651.5  
Gross Margin/(Loss)
     173.9       (15.3 )     —       189.2  
SG&A
     201.6       4.3       9.9       187.4  
Operating (Loss)/Income
     (27.8 )     (19.6 )     (9.9 )     1.7  
Income Tax (Benefit)/Expense
     (10.7 )     (8.0 )     (4.0 )     1.3  
Net (Loss)/Income
   $ (15.6 )     (11.6 )     (5.9 )     1.9  
(Loss)/Earnings Per Share
   $ (0.22 )   $ (0.17 )   $ (0.08 )   $ 0.03  
In addition to the non-GAAP disclosures above, the following non-GAAP disclosures were also included in the Company’s second quarter earnings conference call.
Reconciliation of fiscal 2006 second quarter GAAP earnings to non-GAAP earnings:
Non-GAAP earnings for the second quarter of fiscal 2006 exclude the income statement impact from the 74 demo stores closed during fiscal 2007.
                         
            Non-GAAP        
            Adjustments        
            Attributable to        
    GAAP     74 demo     Non-GAAP  
    Amounts     Store Closures     Amounts  
Net Sales
   $ 313.7     $ 9.3     $ 304.4  
Gross Margin
     97.4       (0.4 )     97.8  
SG&A
     82.9       3.7       79.2  
Operating Income
     14.6       (4.0 )     18.6  
Income Tax Expense
     6.0       (1.5 )     7.5  
Net Income
   $ 9.7     $ (2.5 )   $ 12.2  
Earnings/(Loss) Per Share
   $ 0.14     $ (0.03 )   $ 0.17  

 

 

Reconciliation of fiscal 2007 second quarter GAAP earnings to non-GAAP earnings, excluding the operations of the demo and One Thousand Steps businesses as a whole:
This non-GAAP disclosure expresses earnings per share in the absence of the operations of the demo and One Thousand Steps businesses as a whole, including all associated direct expenses and headcount. This non-GAAP disclosure does not include an allocation of distribution center charges or any other home office department such as finance, human resources or information systems.
                                 
                    Non-GAAP        
                    Adjustments        
            Non-GAAP     Attributable        
            Adjustments     to One        
            Attributable     Thousand        
    GAAP     to demo     Steps     Non-GAAP  
    Amounts     Operations     Operations     Amounts  
Net Sales
   $ 344.2     $ 30.8     $ 1.4     $ 312.0  
Gross Margin/(Loss)
     91.0       (8.8 )     (1.7 )     101.5  
SG&A
     109.6       11.7       10.9       87.0  
Operating (Loss)/Income
     (18.6 )     (20.5 )     (12.7 )     14.6  
Income Tax (Benefit)/Expense
     (7.5 )     (8.6 )     (5.3 )     6.3  
Net (Loss)/Income
   $ (10.5 )     (11.9 )     (7.4 )     8.8  
(Loss)/Earnings Per Share
   $ (0.15 )   $ (0.17 )   $ (0.11 )   $ 0.13