e8vk - SEC.gov | HOME Carolina 0-398 56-0292920 (State or Other Jurisdiction of Incorporation)...

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0000950123-10-044129.txt : 201005050000950123-10-044129.hdr.sgml : 2010050520100505090736ACCESSION NUMBER:0000950123-10-044129CONFORMED SUBMISSION TYPE:8-KPUBLIC DOCUMENT COUNT:23CONFORMED PERIOD OF REPORT:20100505ITEM INFORMATION:Results of Operations and Financial ConditionITEM INFORMATION:Financial Statements and ExhibitsFILED AS OF DATE:20100505DATE AS OF CHANGE:20100505

FILER:

COMPANY DATA:COMPANY CONFORMED NAME:LANCE INCCENTRAL INDEX KEY:0000057528STANDARD INDUSTRIAL CLASSIFICATION:COOKIES & CRACKERS [2052]IRS NUMBER:560292920STATE OF INCORPORATION:NCFISCAL YEAR END:1226

FILING VALUES:FORM TYPE:8-KSEC ACT:1934 ActSEC FILE NUMBER:000-00398FILM NUMBER:10799703

BUSINESS ADDRESS:STREET 1:13024 BALLANTYNE CORPORATE PLSTREET 2:SUITE 900CITY:CHARLOTTESTATE:NCZIP:28277BUSINESS PHONE:7045541421

MAIL ADDRESS:STREET 1:13024 BALLANTYNE CORPORATE PLSTREET 2:SUITE 900CITY:CHARLOTTESTATE:NCZIP:28277

8-K1g23249e8vk.htmFORM 8-K

e8vk

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section13 or 15(d) of the
Securities Exchange Act of 1934

Date of report (Date of earliest event reported): May5, 2010

LANCE, INC.

(Exact Name of Registrant as Specified in Charter)

North Carolina

0-398

56-0292920

(State or Other Jurisdiction
of Incorporation)

(Commission
File Number)

(IRS Employer
Identification No.)

13024 Ballantyne Corporate Place, Ste 900, Charlotte, NC

28277

(Address of Principal Executive Offices)

(Zip Code)

Registrantstelephone number, including area code: (704)554-1421

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfythe filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule14d-2(b) under the Exchange Act (17 CFR240.14d-2(b))

o Pre-commencement communications pursuant to Rule13e-4(c) under the Exchange Act (17 CFR240.13e-4(c))

Item2.02. Results of Operations and Financial Condition.

On May5, 2010, Lance, Inc. (the Company) issued a press release with respect to its financialresults for the first quarter ended March27, 2010. A copy of the press release is being furnishedas Exhibit99.1 hereto. The Company will also hold a conference call and live webcast on May5, 2010 todiscuss its financial results. A copy of the slides to be presented during the call is being furnishedas Exhibits 99.2. The press release and slide presentation contain forward-looking statementsregarding the Company and include cautionary statements identifying important factors that couldcause actual results to differ materially.

Each of the exhibits attached hereto also present measures not derived in accordance with generallyaccepted accounting principles (GAAP). The Company believes these non-GAAP financial measuresprovide useful information to investors as the measures emphasize core on-going operations and arehelpful in comparing past and present operating results. The Company uses these measures toevaluate past performance and prospects for future performance. The presentation of non-GAAPfinancial measures by the Company should not be considered in isolation or as a substitute for theCompanys financial results prepared in accordance with GAAP.

The information furnished under this Item2.02 shall not be deemed filed for purposes of Section18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in anyfiling under the Securities Act of 1933, except as shall be expressly set forth by specificreference in a filing.

Item9.01. Financial Statements and Exhibits.

(d)Exhibits.

Exhibit

Number Description

99.1

Press Release, dated May5, 2010, with respect to the Companys financial results for thefirst quarter ended March27, 2010.

99.2

Slide Presentation, dated May5, 2010, with respect to the Companys financial results forthe first quarter ended March27, 2010.

The information furnished as exhibits hereto shall not be deemed to be filed for purposes ofSection18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by referencein any filing under the Securities Act of 1933, except as shall be expressly set forth by specificreference in a filing.

2

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has dulycaused this report to be signed on its behalf by the undersigned hereunto duly authorized.

LANCE, INC.
(Registrant)

Date: May 5, 2010 By: /s/ Rick D. Puckett

Rick D. Puckett

Executive Vice President, Chief Financial Officer,
Treasurer and Secretary

3

SECURITIES AND EXCHANGE COMMISSION
Washington, DC

EXHIBITS

CURRENT REPORT
ON
FORM 8-K

Date of Event Reported:

Commission File No:

May5, 2010

0-398

LANCE, INC.

EXHIBIT INDEX

Exhibit No. Exhibit Description

99.1

Press Release, dated May5, 2010, with respect to the Companys financial results for thefirst quarter ended March27, 2010.

99.2

Slide Presentation, dated May5, 2010, with respect to the Companys financial results forthe first quarter ended March27, 2010.

EX-99.12g23249exv99w1.htmEX-99.1

exv99w1

Exhibit99.1

CONTACTS:
Mark Carter, VP Strategic Initiatives and Investor Relations (704)557-8386
Joe Calabrese, Financial Relations Board (212)827-3772

IMMEDIATE RELEASE
May5, 2010

Lance, Inc. Reports Results for First Quarter 2010

Achieves first quarter net revenues of $221.6million, a 3% increase over the 2009first quarter

Reports 2010 first quarter earnings per diluted share of $0.04 excluding special items

Reports 2010 first quarter earnings per diluted share of a loss of $0.02 includingspecial items

Declares quarterly dividend of $0.16 per share on common stock

Updates full year 2010 estimates

Charlotte, NC, May5, 2010 Lance, Inc. (Nasdaq-GS: LNCE) today reported net revenues for thefirst quarter ended March27, 2010 of $221.6million, an increase of 3% over the prior year firstquarter net revenues of $215.8million.

The Companys branded product net sales, which represented about 57% of total revenue in the 2010first quarter, decreased approximately 1% from the first quarter of 2009. Net revenue wasnegatively impacted by increased promotional pricing during the first quarter of 2010. Sales ofbranded products to grocery stores, dollar stores, mass merchandisers and distributors increasedcompared to the same quarter of last year due to the acquisition of Stella Doro, new productofferings and growth of existing products with new and established customers. These increases weremore than offset by double-digit revenue declines from certain channels, including conveniencestores, up-and-down the street customers, and food service establishments, largely reflecting theimpact of lower consumer spending in these channels.

The Companys non-branded product net sales increased approximately 7% in the 2010 first quarter.Growth in this category was well below recent trends, reflecting increased promotional activityfrom branded competitors, resulting in lower volume than the Companys expectations

Lance realized first quarter 2010 net income of $1.2million excluding special items, or $0.04 perdiluted share, as compared to first quarter 2009 net income of $6.5million, or $0.20 per dilutedshare. The special items recognized during the first quarter of 2010 consisted of after-taxexpenses of $1.9million associated with an unsuccessful bid for a targeted acquisition. Includingthe special items identified above, first quarter 2010 net loss was $0.8million, or a loss perdiluted share of $0.02.

Comments from Management

We are disappointed that our first quarter revenue, profit margin and EPS were well below ourexpectations, commented David V. Singer, President and Chief Executive Officer. Our non-brandedsales were impacted by more aggressive promotional pricing by branded competitors. Our brandedsales suffered from less effective promotions in an increasingly competitive environment. Becausewe expected higher sales in the first quarter, we committed additional costs to support futuregrowth. The combination of higher costs, softer than planned volume, and less productivepromotions lowered our profit margin significantly in the quarter. Since this margin squeezeoccurred in our seasonally weakest quarter, our EPS suffered significantly. We are taking steps toreduce our operating costs, making changes to our promotional approach to improve productivity, andtaking actions to support our volume growth. We believe these measures will drive a rebound inour profit margin, especially as we move into our seasonally stronger quarters.

Company 2010 Estimates Updated

Based on its assessment of the current operating and competitive environment, the Company revisedits net revenue estimate for the full year 2010 to a range of $930 and $950million, and itsearnings per diluted share to a range of $1.10 and $1.25, excluding special items. The Companyalso revised its full year estimate of capital expenditures to a range of $35 to $40million.Prior estimates, which were previously announced on February10, 2010, reflected full year netrevenue between approximately $965 and $990million and earnings per diluted share betweenapproximately $1.41 and $1.53, excluding special items. The Companys previous estimate of capitalexpenditures was a range of $40 to $45million.

Dividend Declared

The Company also announced the declaration of a quarterly cash dividend of $0.16 per share on theCompanys common stock. The dividend is payable on May25, 2010 to stockholders of record at theclose of business on May17, 2010.

Conference Call

Lance, Inc. has scheduled a conference call and presentation with investors at 9:00 am eastern timeon Wednesday, May5, 2010 to discuss financial results. To participate in the conference call, thedial-in number is (800)789-3681 for U.S. callers or (702)696-4943 for international callers. Acontinuous telephone replay of the call will be available between 1:00 pm on May 5th and midnighton May12th. The replay telephone number is (800)642-1687 for U.S. callers or (706)645-9291 forinternational callers. The replay access code is 70129099. Investors may also access a web-basedreplay of the conference call at Lances web site, www.lanceinc.com.

The conference call and accompanying slide presentation will be webcast live through the InvestorRelations section of Lance Inc.s website www.lanceinc.com. In addition, the slide presentationwill be available to download and print approximately 30 minutes before the webcast at LancesInvestor Relations home page.

About Lance, Inc.

Lance, Inc., headquartered in Charlotte, NC, manufactures and markets snack foods throughout muchof the United States and other parts of North America. The Companys products include sandwichcrackers, sandwich cookies, potato chips, crackers, cookies, other snacks, sugar wafers, nuts,restaurant style crackers and candy. Lance has manufacturing facilities in North Carolina, Iowa,Georgia, Massachusetts, Texas, Florida, Ohio and Ontario, Canada. Products are sold under theLance, Cape Cod, Toms, Archway, and Stella Doro brand names along with a number of private labeland third partybrands. The Companys products are distributed through a direct-store-delivery system, a network of

independent distributors and direct shipments to customer locations. Products are distributedwidely through grocery and mass merchant stores, convenience stores, club stores, food serviceoutlets and other channels.

This news release contains statements which may be forward looking within the meaning of applicablesecurities laws. The statements may include projections regarding future earnings and resultswhich are based upon the Companys current expectations and assumptions, which are subject to anumber of risks and uncertainties. Factors that could cause actual results to differ includegeneral economic conditions, increases in cost or availability of ingredients, packaging, energyand employees, price competition and industry consolidation, risks from large customers, ability toexecute strategic initiatives, product recalls or safety concerns, disruptions of our supply chainor information technology systems, changes in consumer preferences, food industry and regulatoryfactors, and interest rate and foreign exchange rate risks, as well as those that have beendiscussed in our most recent Form 10-K filed with the Securities and Exchange Commission.

LANCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME/(LOSS)
(in thousands, except share and per-share amounts)
(unaudited)

Quarter Ended

March 27, March 28,

2010 2009

Net revenue $ 221,617 $ 215,809

Cost of sales 137,868 131,413

Gross margin 83,749 84,396

Selling, general and administrative 80,420 73,505

Other expense, net 3,610 61

(Loss)/earnings before interest and income taxes (281 ) 10,830

Interest expense, net 860 812

(Loss)/income before income taxes (1,141 ) 10,018

Income tax (benefit)/expense (371 ) 3,566

Net (loss)/income $ (770 ) $ 6,452

Basic earnings per share $ (0.02 ) $ 0.21

Weighted average shares outstanding basic 31,758,000 31,403,000

Diluted earnings per share $ (0.02 ) $ 0.20

Weighted average shares outstanding diluted 31,758,000 32,064,000

LANCE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)

March 27, December 26,

2010 2009

ASSETS

Current assets:

Cash and cash equivalents $ 5,826 $ 5,418

Accounts receivable, net of allowances of $1,123 and $972, respectively 87,858 87,172

Inventories 53,346 58,037

Prepaid income taxes 7,733 238

Deferred income taxes 5,181 9,790

Prepaid expenses and other current assets 17,023 18,227

Total current assets 176,967 178,882

Other assets:

Fixed assets, net of accumulated depreciation of $284,633 and $281,191,respectively 224,463 225,981

Goodwill, net 91,797 90,909

Other intangible assets, net 34,976 35,154

Other noncurrent assets 5,700 5,365

Total assets $ 533,903 $ 536,291

LIABILITIES AND STOCKHOLDERS EQUITY

Current liabilities:

Accounts payable $ 29,286 $ 29,777

Other payables and accrued liabilities 51,901 66,589

Total current liabilities 81,187 96,366

Other liabilities:

Long-term debt 128,000 113,000

Deferred income taxes 36,896 35,515

Other noncurrent liabilities 16,392 16,723

Total liabilities 262,475 261,604

Commitments and contingencies

Stockholders equity:

Common stock, 32,160,055 and 32,093,193 shares outstanding, respectively 26,799 26,743

Preferred stock, no shares outstanding

Additional paid-in capital 62,039 60,829

Retained earnings 170,417 176,322

Accumulated other comprehensive income 12,173 10,793

Total stockholders equity 271,428 274,687

Total liabilities and stockholders equity $ 533,903 $ 536,291

LANCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(in thousands)
(unaudited)

Quarter Ended

March 27, March 28,

2010 2009

Operating activities

Net (loss)/income $ (770 ) $ 6,452

Adjustments to reconcile net income to cash from operating activities:

Depreciation and amortization 9,596 8,501

Stock-based compensation expense 1,821 1,575

Loss on sale of fixed assets 54 54

Impairment of long-lived assets 584

Changes in operating assets and liabilities (12,819 ) (20,458 )

Net cash used in operating activities (1,534 ) (3,876 )

Investing activities

Purchases of fixed assets (7,605 ) (5,238 )

Proceeds from sale of fixed assets 61 206

Net cash used in investing activities (7,544 ) (5,032 )

Financing activities

Dividends paid (5,134 ) (5,049 )

Issuances of common stock 748 1,734

Repurchases of common stock (1,261 ) (127 )

Net proceeds from existing credit facilities 15,000 14,000

Net cash provided by financing activities 9,353 10,558

Effect of exchange rate changes on cash 133 (8 )

Increase in cash and cash equivalents 408 1,642

Cash and cash equivalents at beginning of period 5,418 807

Cash and cash equivalents at end of period $ 5,826 $ 2,449

Supplemental information:

Cash paid for income taxes, net of refunds of $12 and $115, respectively $ 842 $ 608

Cash paid for interest $ 831 $ 856

LANCE, INC.
RECONCILIATION OF NON-GAAP MEASURES
(in thousands, except per-share amounts)
(unaudited)

Net of Per Diluted

Quarter Ended March 27, 2010 Tax Share

Net Loss $ (770 ) $ (0.02 )

Unsuccessful bid for targeted acquisition 1,930 0.06

Net Income, excluding special items $ 1,160 $ 0.04

* Includes $930 adjustment for income tax

EX-99.23g23249exv99w2.htmEX-99.2

exv99w2

Exhibit 99.2

[Graphic Appears Here]

1st Quarter 2010 Conference Call May5, 2010

#gForward-Looking Statements#hDuring this discussion, we may make forward-looking statements within the meaning of applicablesecurities laws. The statements may include projections regarding future earnings and resultswhich are based upon management#fs current expectations and assumptions, which are subject to anumber of risks and uncertainties. Factors that could cause actual results to differ includegeneral economic conditions, increases in cost or availability of ingredients, packaging, energyand employees, price competition and industry consolidation, risks from large customers, abilityto execute strategic initiatives, product recalls or safety concerns, disruptions of our supplychain or information technology systems, changes in consumer preferences, food industry andregulatory factors, and interest rate and foreign exchange rate risks, as well as those that havebeen discussed in our most recent Form 10-K filed with the Securities and Exchange Commission.[Graphic Appears Here]1st Quarter 2010 Conference Call

2

[Graphic Appears Here][Graphic Appears Here]1st Quarter 2010 Conference Call

Net Revenue Growth(Unaudited) 16.2%13.9%11.8% 11.8%9.7%12.4%10.6%9.7%8.5% 8.4%6.4%7.3%9.0%7.4%4.5%7.3%7.7%5.5%4.6% 5.0%2.5%0.7%4.1%6.2%2.7%0.9%Q1-2007 Q2-2007 Q3-2007 Q4-2007 Q1-2008 Q2-2008 Q3-2008 Q4-2008 Q1-2009 Q2-2009 Q3-2009 Q4-2009Q1-2010QuarterlyTrailing 4 Quarters[Graphic Appears Here]1st Quarter 2010 Conference Call4

Q1 2010 Net Revenue Summary

$ in Millions

(Unaudited) Q1 2010 2010 vs. 2009Branded $126.6 $(0.6) -0.5%Non-Branded 95.0 6.4 7.2%Total Net Revenue $221.6 $5.8 2.7%[Graphic Appears Here]1st Quarter 2010 Conference Call5

| Gross Margin Trend(Unaudited) 43.6%44.5%43.5% 43.6% 37.2% 37.6%43.1% 41.7%40.3%40.9% 40.4% 41.1%40.0% 40.4% 39.0% 37.4% 36.6% 39.4% 39.1%40.1%37.8%38.1%38.5%37.8%37.2%Q1-2007 Q2-2007Q3-2007 Q4-2007Q1-2008 Q2-2008QuarterlyQ3-2008 Q4-2008* Q1-2009 Q2-2009 Q3-2009*Q4-2009* Q1-2010Trailing 4 Quarters* Excludes special items. For a corresponding reconciliation of data excluding special items todata including special items, see the reconciliation of non-GAAP measures in the Appendix.[Graphic Appears Here]1st Quarter 2010 Conference Call6

SG&A % of Net Revenue(Unaudited) 38.2% 35.5% 35.6%37.2%36.2%37.7%34.9%35.7%36.8% 36.4%36.0% 32.1%33.0% 34.1% 34.0% 34.0% 33.0%34.7% 34.1%34.3%33.8%33.5%

33.3%33.8%Q1-2007 Q2-2007 Q3-2007 Q4-2007 Q1-2008 Q2-2008 Q3-2008 Q4-2008* Q1-2009 Q2-2009Q3-2009*Q4-2009*Q1-2010*QuarterlyTrailing 4 Quarters* Excludes special items. For a corresponding reconciliation of data excluding special items todata including special items, see the reconciliation of non-GAAP measures in the Appendix.[Graphic Appears Here]1st Quarter 2010 Conference Call7

Operating Profit** Margin Trend(Unaudited) 8.2%8.1%6.9%5.7%6.1%6.3%6.4%6.4%6.2%5.4%5.7%6.4%6.6%5.0%4.6%5.8%5.4%4.5%4.2%2.5%2.8%3.6%1.6%1.5%2.4%0.8%Q1-2007 Q2-2007 Q3-2007 Q4-2007 Q1-2008 Q2-2008 Q3-2008 Q4-2008* Q1-2009 Q2-2009Q3-2009*Q4-2009*Q1-2010*QuarterlyTrailing 4 Quarters* Excludes special items. For a corresponding reconciliation of data excluding special items todata including special items, see the reconciliation of non-GAAP measures in the Appendix.** Operating profit percentage is a non-GAAP measure. For a corresponding reconciliation ofoperating profit percentage to the most comparable GAAP measure, see the reconciliation of non-GAAPin the Appendix.[Graphic Appears Here]1st Quarter 2010 Conference Call8

Q1 2010 Financial Summary$ in Millions, except EPS(Unaudited)

Q1 2010** Q1 2009Net Revenue $221.6 $215.8Gross Margin % 37.8% 39.1%SG&A Expense % 36.2% 34.1%Operating Profit %* 1.6% 5.0%Tax Rate 32.5% 35.6%Net Income $1.2 $6.5Diluted EPS $0.04 $0.20* Operating profit percentage is a non-GAAP measure. For a corresponding reconciliation ofoperating profit percentage to the most comparable GAAP measure, see the reconciliation of non-GAAPmeasures in the Appendix.** Excludes special items. For a corresponding reconciliation of data excluding special items todata including special items, see the reconciliation of non-GAAP measures in the Appendix.[Graphic Appears Here]1st Quarter 2010 Conference Call9

1st Quarter Key Statistics$ in Millions(Unaudited)| | | | Trailing 4 QuartersQ1 2010** Q1 2009**EBITDA* $86.8 $74.0EBITDA* % of Net Revenue 9.4% 8.5%NET DEBT* (quarter-end) $122.2 $109.6

(Total Debt less Cash) NET DEBT/EBITDA 1.4 1.5* EBITDA and Net Debt are non-GAAP measures. For a corresponding reconciliation of EBITDA and NetDebt to the most comparable GAAP measures, see the reconciliation of non-GAAP measures in theAppendix.** Excludes special items. For a corresponding reconciliation of data excluding special items todata including special items, see the reconciliation of non-GAAP measures in the Appendix.[Graphic Appears Here]1st Quarter 2010 Conference Call10

1st Quarter Selected Cash Flow Items$ in Millions(Unaudited) Q1 2010 Q1 2009Cash Flow from Operating Activities $(1.5) $(3.9)Capital Expenditures (7.6) (5.2)Free Cash Flow Before Dividends $(9.1) $(9.1)Dividends Paid $(5.1) $(5.0)[Graphic Appears Here]

1st Quarter 2010 Conference Call11

2010 Full Year Estimates$ in Millions, except EPSNet Revenue $930 $950Diluted Earnings Per Share $1.10 $1.25Capital Spending $35 to $40[Graphic Appears Here]1st Quarter 2010 Conference Call12

Operations OverviewDave SingerPresident & Chief Executive Officer1st Quarter 2010 Conference Call

Q&A1st Quarter 2010 Conference Call

Appendix1st Quarter 2010 Conference Call

Reconciliation of Non-GAAP MeasuresThis presentation includes certain measures not derived in accordance with generally accepted accounting principles (#gGAAP#h) .Such measures should not be considered substitutes for any measures derived in accordance with GAAP and may also be inconsistentwith similar measures presented by other companies. Reconciliation of these non-GAAP financial measures to the most nearly comparableGAAP measures, if applicable, is presented on the slides that follow.The Company believes these non-GAAP financial measures provide useful information to investors as the measures emphasize core ongoing operations and are helpful in comparing past and present operating results. The Company uses these measures to evaluate past performance and prospects for future performance. The presentation of non-GAAP financial measures by the Company should not be considered in isolation or as a substitute for the Company#fs financial results prepared in accordance with GAAP.[Graphic Appears Here]1st Quarter 2010 Conference Call16

Reconciliation of Non-GAAP Measures: Q1 2010 Special Items$ in Millions, except EPS(Unaudited)| | | | | | Q1 2010 Q1 2010 Q1 2010IncludingSpecialExcludingSpecial ItemsItemSpecial ItemsNet Revenue $221.6 $221.6COGS $137.9 $137.9Gross Margin $83.7 $ $83.7 Gross Margin % 37.8% 37.8%SG&A $80.4 $0.2 $80.2SG&A % 36.3% 36.2%

Other expense, net $3.6 $2.6 $1.0(Loss)/income before interest and income taxes $(0.3) $(2.8) $2.5Interest expense, net $0.8 $0.8(Loss)/income before income taxes $(1.1) $(2.8) $1.7Income tax (benefit)/expense $(0.3) $(0.8) $0.5Income tax rate 32.5% 32.5%Net (loss)/income $(0.8) $(2.0) $1.2Weighted average shares outstanding -diluted (in millions) 31.8 31.8 31.8

Diluted (loss)/earnings per share $(0.02) $(0.06) $0.04[Graphic Appears Here]1st Quarter 2010 Conference Call17

Reconciliation of Non-GAAP Measures: Operating Profit$ in Millions(Unaudited) Q1 2010 Q1 2009(Loss)/income before interest & income taxes $(0.3) $10.8Add BackOther expense, net $3.6 $0.1LessSpecial item included in Operating Profit $(0.2) $ -

EqualsOperating Profit excluding special item $3.5 $10.9Net Revenue $221.6 $215.8Operating Profit % of Net Revenue 1.6% 5.1%[Graphic Appears Here]1st Quarter 2010 Conference Call18

Reconciliation of Non-GAAP Measures: EBITDA$ in Millions(Unaudited)| Trailing 4 Quarters(Loss)/income before interest & income taxesLessSpecial items included in (loss)/income beforeinterest & income taxes ) )

Add BackDepreciation & amortizationEqualsEBITDA excluding special itemsNet RevenueEBITDA excluding special items % of Net Revenue9.4%8.5%[Graphic Appears Here]1st Quarter 2010 Conference Call19

Reconciliation of Non-GAAPMeasures: Net Debt$ in Millions(Unaudited) Total DebtLessCash & Cash Equivalents

Net Debt (quarter-end)[Graphic Appears Here]1st Quarter 2010 Conference Call20

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