Exhibit 99.1
Reconciliation of Adjusted EBITDA:
In addition to the results reported in accordance with generally accepted accounting principles in the United States of America (“GAAP”), The Yankee Candle Company, Inc. (the “Company”) has provided information regarding “Adjusted EBITDA,” as defined, which is a non-GAAP financial measure. Adjusted EBITDA is defined as earnings/loss from continuing operations before interest, taxes, depreciation and amortization adjusted for the effects of equity-based compensation, Madison Dearborn Capital Partners, L.L.C. (“Madison Dearborn”) advisory fees, purchase accounting, restructuring, loss on debt extinguishment, realized (gains) losses on foreign currency transactions, loss on store closings and certain non-recurring expenses. Adjusted EBITDA is not intended to represent cash flow from operations as defined by GAAP and should not be used as an alternative to net income (loss) as an indicator of operating performance or to cash flow as a measure of liquidity. We believe the presentation of Adjusted EBITDA provides useful information to investors regarding our results of operations because such presentation assists in analyzing and benchmarking the performance value of our business. We believe Adjusted EBITDA is useful to investors because it helps enable investors to evaluate our business in the same manner as our management evaluates our business, and because this measure is frequently used by securities analysts, investors and other interested parties in the evaluation of companies with substantial financial leverage. In addition, because Adjusted EBITDA facilitates internal comparisons of our historical operating performance on a more consistent basis, we also use Adjusted EBITDA for business planning purposes, to incent and compensate our management personnel and to measure our performance relative to that of our competitors. While Adjusted EBITDA is frequently used as a measure of operating performance and the ability to meet debt service requirements, it is not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the method of calculation. In evaluating our operating performance these measures should be used in conjunction with GAAP measures:
| Fifty-Two Weeks Ended January 1, 2011 | Fifty-Two Weeks Ended December 31, 2011 | Fifty-Two Weeks Ended December 29, 2012 | Thirteen Weeks Ended March 31, 2012 | Thirteen Weeks Ended March 30, 2013 | Fifty-Two Weeks Ended March 30, 2013 | |||||||||||||||||||
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Net income (loss) | $ | 41,909 | $ | 54,547 | $ | 56,323 | $ | (3,513 | ) | $ | (1,733 | ) | $ | 58,103 | ||||||||||
Loss from discontinued operations, net of income taxes | 379 | 262 | 134 | 43 | 24 | 115 | ||||||||||||||||||
Income tax provision for (benefit from) continuing operations | 23,688 | 30,497 | 33,533 | (1,921 | ) | (248 | ) | 35,206 | ||||||||||||||||
Interest expense, net-excluding amortization of deferred financing fees | 79,798 | 60,048 | 59,700 | 14,637 | 13,651 | 58,714 | ||||||||||||||||||
Amortization of financing fees | 4,840 | 4,093 | 4,595 | 1,039 | 1,065 | 4,621 | ||||||||||||||||||
Depreciation and amortization | 38,135 | 37,576 | 27,302 | 7,562 | 6,562 | 26,302 | ||||||||||||||||||
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EBITDA from continuing operations | 188,749 | 187,023 | 181,587 | 17,847 | 19,321 | 183,061 | ||||||||||||||||||
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Equity-based compensation | 962 | 3,920 | 753 | 203 | 159 | 709 | ||||||||||||||||||
| Fifty-Two Weeks Ended January 1, 2011 | Fifty-Two Weeks Ended December 31, 2011 | Fifty-Two Weeks Ended December 29, 2012 | Thirteen Weeks Ended March 31, 2012 | Thirteen Weeks Ended March 30, 2013 | Fifty-Two Weeks Ended March 30, 2013 | |||||||||||||||||||
Madison Dearborn advisory fees | 1,500 | 1,500 | 1,500 | 375 | 375 | 1,500 | ||||||||||||||||||
Purchase accounting | 1,283 | 929 | 1,420 | 531 | 140 | 1,029 | ||||||||||||||||||
Restructuring costs(1) | 829 | — | 1,725 | 655 | 764 | 1,834 | ||||||||||||||||||
Loss on extinguishment of debt | — | — | 13,376 | — | 79 | 13,455 | ||||||||||||||||||
Realized losses (gains) on foreign currency | 384 | (187 | ) | 772 | 438 | (45 | ) | 289 | ||||||||||||||||
Loss on store closings | 194 | 145 | 361 | 29 | — | 332 | ||||||||||||||||||
Estimated impact of certain non-recurring events (2) | — | — | 4,722 | 52 | 310 | 4,980 | ||||||||||||||||||
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Adjusted EBITDA | 193,901 | 193,330 | 206,216 | 20,130 | 21,103 | 207,189 | ||||||||||||||||||
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| (1) | Restructuring costs include severance, lease terminations and other costs associated with the restructuring of our business. |
| (2) | Includes for the 52 weeks ended December 31, 2012, the thirteen weeks ended March 31, 2012 and the thirteen weeks ended March 30, 2013: (i) $2.9 million, $0.05 million and $0.3 million, respectively, of identified non-recurring costs related to the implementation of our new European enterprise resource planning (“ERP”) system and warehouse moving costs, (ii) $1.5 million, $0 and $0, respectively, of negative impact on EBITDA from continuing operations from our international segment estimated by our management to be due to estimated lost sales resulting from disruptions caused by implementation of the ERP system, using an assumed revenue growth rate over the revenue in the prior-year period based upon the year to date revenue growth rate prior to implementation of the ERP system, and (iii) $0.3 million, $0 and $0, respectively, of negative impact on EBITDA from continuing operations estimated by our management to be due to estimated lost sales in our fundraising segment caused by Hurricane Sandy, using an assumed revenue growth rate over the revenue in the prior year period based upon the year to date revenue growth rate prior to the hurricane. |
