
	First Quarter			Second Quarter			Third Quarter			Fourth Quarter
Year ended July 31, 2014
Net sales	$	234,668		$	220,577		$	190,892		$	219,070
Gross profit		57,933			55,928			45,096			49,289
Operating expenses (1)		84,190			53,913			56,320			41,161
Net income (loss) (2)		(42,153	)		(15,060	)		(105,633	)		(1,856	)
Basic earnings (loss) per share		(1.92	)		(0.68	)		(3.63	)		(0.06	)
Basic shares (in thousands)		21,954			22,052			29,119			30,993
Diluted earnings (loss) per share		(1.92	)		(0.68	)		(3.63	)		(0.06	)
Diluted shares (in thousands)		21,954			22,052			29,119			30,993


	First Quarter			Second Quarter			Third Quarter			Fourth Quarter
Year ended July 31, 2013
Net sales	$	258,462		$	220,844		$	184,905		$	199,801
Gross profit		58,546			50,569			43,350			53,058
Operating expenses (3)		54,742			25,935			45,230			197,880
Net income (loss) (4)		(10,729	)		10,141			(15,582	)		(143,741	)
Basic earnings (loss) per share		(0.49	)		0.46			(0.71	)		(6.56	)
Basic shares (in thousands)		21,753			21,781			21,819			21,905
Diluted earnings (loss) per share		(0.49	)		(0.37	)		(0.71	)		(6.56	)
Diluted shares (in thousands)		21,753			23,215			21,819			21,905

(1)

In the first quarter of fiscal 2014, the Company reached a preliminary approval of which was granted on September 26, 2013 to settle the private securities class action pending against the Company and two of the Company’s former officers. In the fourth quarter of fiscal 2013, the Company recognized an aggregate settlement liability of $96.1 million which included a cash settlement of $11.0 million and a stock settlement valued at $85.1 million at the close of the stock market on August 20, 2013. For fiscal 2014, the Company recorded a loss of $38.1 million a as a result of the change in the fair value of the stock settlement in Selling, general and administrative expenses.

(2)

In the third quarter of fiscal 2014, the Company refinanced its debt capital structure. The Company used the net proceeds of debt refinancing transaction including proceeds from Oaktree’s warrant exercise to (1) prepay approximately $348 million of indebtedness outstanding under, and terminate, the Secured Credit Facility, (2) prepay approximately $276 million of indebtedness outstanding under, and terminate, the Oaktree Senior Notes, (3) pay approximately $32.3 million of prepayment premiums to the holders of the Oaktree Senior Notes resulting in a debt extinguishment loss of approximately $83.0 million.

(3)

In the fourth quarter of fiscal 2013, the Company recorded settlement costs associated with the private securities class action in the aggregate amount of $96.1 million. Refer to Note 11 to the Notes to the Consolidated Financial Statements for further detail. Additionally, the Company recorded asset impairment charges of $37.6 million related to brand intangibles and customer contracts and related relationships. Refer to Note 5 to the Notes to the Consolidated Financial Statements.

(4)

During the preparation of the Quarterly Report on Form 10-Q for the first quarter of fiscal 2014, the Company determined that the statutory income tax rate used to value United Kingdom deferred taxes was not correct as of July 31, 2013. This was due to a change in the statutory tax rate enacted in the fourth quarter of fiscal 2013, which resulted in a $3.2 million overstatement of the net deferred income tax liability balance at July 31, 2013 and a $3.3 million understatement of the income tax benefit for the year. Refer to Note 1 to the Notes to the Consolidated Financial Statements.