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.
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| | | | | | | | | | | 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.
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| | | | | | | | | | | 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 | |
