The company recognized a $1.9 million loss on the Oaktree warrant liability in the quarter due to the change in the fair value of the warrant between Jan. 31, 2013 and April 30, 2013.
Net interest expense was $14.5 million in the third quarter of fiscal 2013 compared to $7.7 million in the same quarter in the prior year. The increase was primarily due to the Oaktree debt and the higher interest rate on the secured credit agreement.
The company's effective tax rate was 5.1 percent for the third quarter of fiscal 2013.
GAAP net loss was $15.6 million compared to a loss of $44.0 million in the prior year. On a non-GAAP basis, net income was $1.1 million compared to a net loss of $4.9 million in the prior year.
EPS for the third quarter of fiscal 2013 on a GAAP diluted basis was a loss of $0.71 compared to a loss of $2.02 in the prior year. Non-GAAP EPS on a diluted basis was earnings of $0.05 compared to a loss of $0.22 in the prior year.
The non-GAAP diluted EPS calculation includes 1.6 million and 1.7 million shares related to the Oaktree warrants based on the Treasury stock method for the third quarter and year-to-date periods, respectively.
Capital expenditures were $2.1 million for the third quarter of fiscal 2013.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was $23.2 million, or 12.6 percent of net sales, in the third quarter of fiscal 2013, compared to$11.2 million, or 5.4 percent of net sales, in the prior year. Year-to-date adjusted EBITDA increased $19.6 million, to $77.2 million, compared to the prior year.
As of April 30, 2013, net debt outstanding was $577.8 million, including the Oaktree debt at its carrying value.
Cash and availability on Diamond's bank revolving line of credit on June 7, 2013 was approximately $96 million.
Consistent with the outlook provided in the second quarter, net sales are expected to decline more in the back half of the fiscal year than the first half as compared to the prior year. Therefore, fourth quarter sales are expected to decline more than in the third quarter, driven primarily by the nuts segment. Fourth quarter gross margin is expected to be largely consistent with year-to-date performance. Advertising spending is expected to increase in the fourth quarter as compared to the third quarter and the prior year due largely to campaigns focused on Kettle and Pop Secret.