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 |