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8-K - YANKEE HOLDING CORP 8-K 8-8-2013 - Yankee Holding Corp.form8k.htm

Exhibit 99.1
 
 
News Release
 
P.O. Box 110  •  Route 5  •  South Deerfield  •  MA  •  01373-0110
 
FOR IMMEDIATE RELEASE

Contact: Lisa McCarthy
(413) 665-8306, Ext. 4670

The Yankee Candle Company, Inc. Reports
Fiscal 2013 Second Quarter Results

South Deerfield, MA – August 8, 2013 – Yankee Holding Corp. and The Yankee Candle Company, Inc. (collectively, “Yankee Candle” or the “Company”) today announced financial results for the second quarter ended June 29, 2013.  Yankee Holding Corp., a direct subsidiary of YCC Holdings LLC (“YCC Holdings”), is a holding company that was formed in connection with the Company's merger with an affiliate of Madison Dearborn Partners, LLC (“MDP”) on February 6, 2007, and is the parent company of The Yankee Candle Company, Inc.

Net sales for the second quarter of 2013 were $155.7 million as compared to net sales of $145.3 million during the second quarter of 2012, an increase of $10.4 million or 7.1%.  Retail segment sales were $86.8 million for the second quarter of 2013 as compared to $81.8 million during the second quarter of 2012, an increase of 6.1%.  Sales from the Company’s Wholesale segment increased 2.4% to $41.5 million during the second quarter of 2013, as compared to $40.5 million during the second quarter of 2012.  Sales in the Company’s International segment were $27.3 million during the second quarter of 2013, compared to $23.0 million during the second quarter of 2012, an increase of 19.0%.

Net sales for the six months ended June 29, 2013 were $319.1 million, compared to $300.4 million for the first six months of fiscal 2012, an increase of 6.2%.

The Company recorded a net loss of $4.9 million for the second quarter of 2013 compared to a net loss of $13.5 million for the second quarter of 2012.  The Company recorded a net loss of $6.6 million during the six months ended June 29, 2013, compared to a net loss of $17.1 million during the first six months of fiscal 2012.  The net loss for the second quarter and first six months of fiscal 2012 include the loss on early extinguishment of debt of $13.4 million recorded in connection with the Company’s April 2012 term loan refinancing.

The Company presents Adjusted EBITDA (as defined below) to provide investors with additional information to evaluate the Company’s operating performance and its ability to service its debt.  Adjusted EBITDA for the second quarter of 2013 was $14.7 million as compared to Adjusted EBITDA of $18.1 million for the prior year second quarter.  Adjusted EBITDA for the first six months of fiscal 2013 was $35.7 million as compared to Adjusted EBITDA of $38.2 million for the first six months of fiscal 2012. Reconciliations of net income to Adjusted EBITDA, which is a non-GAAP financial measure, are included at the end of this press release.

“We delivered above market performance in our Retail business, which together with continued momentum in our strategic growth channels such as International and Consumer Direct, helped deliver sales increases over the prior year quarter,” said Harlan Kent, Chief Executive Officer of Yankee Candle.  “Our Retail business posted its eighth consecutive quarter of positive all-in comparable sales, delivering 5.2% comp sales growth versus the prior year quarter.  Our International business also delivered strong results, with sales increasing 19.0% over the prior year quarter.  The sales growth turned in by these two divisions more than offset sluggishness in our Wholesale business, where tight open to buy conditions and inventory management programs by our wholesale customers continue to have an impact.  As compared to prior year, our earnings were challenged in the quarter by lower contribution from our Wholesale business and an increase in general and administrative expenses related to our ongoing investments in talent and marketing to drive growth.”

2013 Second Quarter Segment Highlights:

· Retail sales were $86.8 million in the second quarter of 2013 compared to $81.8 million in the prior year second quarter, an increase of $5.0 million or 6.1%.  The increase in sales was driven primarily by increased comparable retail sales of $3.7 million and increased sales from our fundraising business of $1.0 million.

· Total Retail comparable sales, which includes sales in our comparable store base and our consumer direct business, increased 5.2% compared to the prior year second quarter.  There were 543 stores included in our comparable store base as of the end of the second quarter of fiscal 2013, compared to 515 stores included in our comparable store base at the end of the prior year quarter.
2

· Wholesale sales were $41.5 million in the second quarter of 2013 compared to $40.5 million in the same quarter of the prior year, an increase of $1.0 million or 2.4%.  The increase was primarily a result of increased sales to our specialty and department store channel, somewhat offset by decreased sales to our premium mass channel.

· International sales were $27.3 million in the second quarter of 2013 as compared to $23.0 million in the prior year quarter, an increase of $4.3 million or 19.0%.  The increase was driven by sales growth across all of our international channels.

Six Months Ended June 29, 2013 Segment Highlights:

· Retail sales were $176.0 million for the first six months of fiscal 2013, an increase of $13.2 million or 8.1% over the prior year period, driven primarily by increased comparable retail sales of 7.8% or $11.4 million and sales from new stores opened after the second quarter of 2012 of approximately $1.3 million.

· Wholesale sales were $85.1 million for the first six months of fiscal 2013, a decrease of $5.6 million from the prior year period.  The decrease was primarily driven by decreased sales in our specialty and department store channel, gift channel and premium mass channel somewhat offset by increased sales to our “all other” channel consisting of various accounts outside of our major channels.

· International sales were $57.9 million for the first six months of fiscal 2013 compared to $46.9 million for the first six months of fiscal 2012, an increase of $11.0 million or 23.5%.  The increase was largely driven by increased sales in our United Kingdom wholesale business, retail concession business and increased sales to distributors primarily in Europe, Asia and Latin America.

“Our strategic investments continue to gain traction and resulted in solid topline growth across our businesses in the second quarter,” said Kent.  “Our Omni-channel business model allows us to capitalize on shopping trends wherever our guest chooses to shop.  We believe we are well positioned as we enter the important fall and holiday seasons to continue this sales momentum while focusing on converting sales to optimize cash generation.”
3

For the quarter ended June 29, 2013, YCC Holdings reported a net loss of $10.6 million, compared to the above-referenced net loss recorded by the Company of $4.9 million.  The difference in the net loss between the Company and YCC Holdings is primarily a result of additional interest expense (net of tax benefits) recorded during the second quarter of 2013 at YCC Holdings of $5.7 million related to the $315.0 million 10.25%/11.0% Senior PIK Notes due 2016 (the “Senior PIK Notes”).

For the twenty-six weeks ended June 29, 2013, YCC Holdings reported a net loss of $17.9 million, compared to the above-referenced net loss recorded by the Company of $6.6 million.  The difference in the net loss between the Company and YCC Holdings is primarily a result of additional interest expense (net of tax benefits) recorded during the first half of 2013 at YCC Holdings of $11.3 million related to the Senior PIK Notes.

Neither Yankee Holding Corp. nor The Yankee Candle Company, Inc. have any obligations with respect to the Senior PIK Notes.  During the first six months of fiscal 2013, Yankee Holding Corp paid dividends of $16.2 million to YCC Holdings.  Such dividends were used by YCC Holdings primarily to pay for interest incurred related to the Senior PIK Notes.

Earnings Conference Call:

The Company will host a conference call to be broadcast via the Internet at 11:00 a.m. (EST) this morning to more fully discuss its second quarter results.  The dial-in number is (800) 860-2442, for International Calls the dial-in number is (412) 858-4600.  When greeted by the operator, request the conference by stating the Company and the host’s last name (Yankee Candle/Kent) or reference the conference title (Q2 2013 Yankee Candle Earnings Conference Call).  This call is being webcast by MultiVu and can be accessed at The Yankee Candle Company's web site at www.yankeecandle.com.   Click on the “About Us” link, select the “Investor Information” link, and then select the “Events Calendar” link.  Enter your registration information ten minutes prior to the start of the conference.
4

About Yankee Candle
 
The Yankee Candle Company, Inc. is the leading designer, manufacturer, wholesaler and retailer of premium scented candles, based on sales, in the giftware industry.  Yankee Candle has a 43-year history of offering distinctive products and marketing them as affordable luxuries and consumable gifts.  The Company sells its products through a North American wholesale customer network of approximately 35,000 store locations, a growing base of Company owned and operated retail stores (561 Yankee Candle Stores located in 46 states and 1 province in Canada as of June 29, 2013), direct mail catalogs, and its Internet website (www.yankeecandle.com).  Outside of North America, the Company sells its products primarily through its subsidiary, Yankee Candle Company (Europe), Ltd., which has an international wholesale customer network of approximately 6,400 store locations and distributors covering a combined 57 countries.
5

Forward Looking Statements
 
This press release may contain certain information constituting “forward-looking statements” for purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. Forward-looking statements include but are not limited to the statements contained herein with respect to management’s current estimates of the Company’s future financial and operating results, and any other statements concerning the Company’s or management’s plans, objectives, goals, strategies, expectations, estimates, beliefs or projections, or any other statements concerning future performance or events.  Actual results could differ materially from those indicated by these forward-looking statements as a result of various risks and uncertainties, including but not limited to the following: the current economic conditions and uncertain future outlook, including continued softness in consumer confidence and spending; the risk that our substantial level of indebtedness could adversely affect our financial condition and operations; that we may not be able to generate sufficient cash flows to service all of our indebtedness; that any failure to protect our reputation could have a material adverse effect on our brand image; the risk of loss of one of our manufacturing or distribution facilities; that we may be unable to maintain our historical growth rates; that our profitability may be affected by increases in the cost of raw materials or that further increases in wax prices above the rate of inflation may negatively impact our cost of goods sold and margins; that any shortages in refined oil supplies could impact our wax supply; the effects of competition in the giftware industry; that there may be a failure of our information technology systems; that a material decline in consumers’ discretionary income could cause our sales and income to decline; that current environmental laws and regulations, or those enacted in the future, could result in additional liabilities and costs; that we may be unable to continue to open new stores successfully or renew leases for existing locations; the risk of a loss or significant deterioration in the financial condition of a significant wholesale customer, or a bankruptcy filing and subsequent bankruptcy proceedings by such a customer; the failure or delay of a third party to supply goods to our customers could adversely impact our business; sustained interruptions in the supply of products from overseas; that restrictive covenants in the indenture governing the Senior PIK Notes, the indentures governing Yankee Candle’s Senior Subordinated Notes and Yankee Candle’s Term Loan Facility and ABL Facility could restrict our operating flexibility; risks associated with the ability of YCC Holdings and Holding Corp. to repay their debt, which is dependent on cash flow generated by Yankee Candle and its subsidiaries; that restrictions in our subsidiaries' debt instruments and under applicable law limit their ability to provide funds to us; that the interests of our controlling stockholders may differ from the interests of the noteholders; that because we are not a diversified company and are primarily dependent upon one industry, we have less flexibility in reacting to unfavorable consumer trends, adverse economic conditions or business cycles; the risk that we lose our senior executive officers, or are unable to attract and retain the talent required for our business; that our international operations subject us to a number of risks, including unfavorable regulatory, labor, tax and political conditions in foreign countries; that we may be required to recognize additional impairment charges against goodwill or intangible assets in the future; seasonal, quarterly and other fluctuations in our business, and general industry and market conditions; the risk of product liability claims; and other factors described or contained in the Company’s most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q on file with the Securities and Exchange Commission.  Any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date.  While we may elect to update certain forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if experience or future events may cause the views contained in any forward-looking statements to change.
6

Yankee Holding Corp. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands)
(Unaudited)

 
 
Thirteen Weeks
 
 
 
Thirteen Weeks
 
 
 
 
Ended
 
 
 
Ended
 
 
 
 
June 29, 2013
 
 
 
June 30, 2012
 
 
Sales:
 
   
 
 
 
   
 
      
Retail
 
$
86,814
     
55.76
%
 
 
$
81,809
     
56.29
%
 
Wholesale
   
41,518
     
26.66
%
 
   
40,530
     
27.88
%
 
International
   
27,348
     
17.57
%
 
   
22,988
     
15.82
%
 
Total sales
   
155,680
     
100.00
%
 
   
145,327
     
100.00
%
 
 
               
 
               
       
Cost of sales
   
71,866
     
46.16
%
 
   
63,906
     
43.97
%
 
Gross profit
   
83,814
     
53.84
%
 
   
81,421
     
56.03
%
 
 
               
 
               
       
Selling expenses: (A)
               
 
               
      
Retail
   
45,578
     
52.50
%
(B)
   
43,401
     
53.05
%
(B)
Wholesale
   
3,086
     
7.43
%
(C)
   
2,921
     
7.21
%
(C)
International
   
7,402
     
27.07
%
(D)
   
6,909
     
30.05
%
(D)
 
               
 
               
       
Total selling expenses
   
56,066
     
36.01
%
 
   
53,231
     
36.63
%
 
 
               
 
               
       
General & administrative expenses
   
20,712
     
13.30
%
 
   
17,951
     
12.35
%
 
Restructuring charge
   
-
     
0.00
%
 
   
1,070
     
0.74
%
 
 
               
 
               
       
Income from operations
   
7,036
     
4.52
%
 
   
9,169
     
6.31
%
 
Interest expense
   
14,883
     
9.56
%
 
   
18,553
     
12.77
%
 
Loss on extinguishment of debt
   
-
     
0.00
%
 
   
13,376
     
9.20
%
 
Other income
   
(469
)
   
-0.30
%
 
   
(1,735
)
   
-1.19
%
 
 
               
 
               
       
Loss before benefit from income taxes
   
(7,378
)
   
-4.74
%
 
   
(21,025
)
   
-14.47
%
 
Benefit from income taxes
   
(2,521
)
   
-1.62
%
 
   
(7,515
)
   
-5.17
%
 
Loss from continuing operations
   
(4,857
)
   
-3.13
%
 
   
(13,510
)
   
-9.31
%
 
 
               
 
               
       
Loss from discontinued operations, net of income taxes
   
(21
)
   
-0.01
%
 
   
(31
)
   
-0.02
%
 
Net loss
 
$
(4,878
)
   
-3.13
%
 
 
$
(13,541
)
   
-9.32
%
 
 

(A) Includes purchase accounting costs that are reflected in the unallocated/corporate/other column within the segment disclosure of the Company's 10-Q.
(B) Retail selling expenses as a percentage of retail sales.
(C) Wholesale selling expenses as a percentage of wholesale sales.
(D) International selling expenses as a percentage of international sales.
7

Yankee Holding Corp. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands)
(Unaudited)

 
 
Twenty-Six Weeks
 
 
 
Twenty-Six Weeks
 
 
 
 
Ended
 
 
 
Ended
 
 
 
 
June 29, 2013
 
 
 
June 30, 2012
 
 
Sales:
 
   
 
 
 
   
 
Retail
 
$
176,026
     
55.17
%
 
 
$
162,777
     
54.19
%
 
Wholesale
   
85,096
     
26.67
%
 
   
90,703
     
30.19
%
 
International
   
57,934
     
18.16
%
 
   
46,914
     
15.62
%
 
Total sales
   
319,056
     
100.00
%
 
   
300,394
     
100.00
%
 
 
               
 
               
 
Cost of sales
   
144,808
     
45.39
%
 
   
135,183
     
45.00
%
 
Gross profit
   
174,248
     
54.61
%
 
   
165,211
     
55.00
%
 
 
               
 
               
 
Selling expenses: (A)
               
 
               
 
Retail
   
92,048
     
52.29
%
(B)
   
88,579
     
54.42
%
(B)
Wholesale
   
6,021
     
7.08
%
(C)
   
7,090
     
7.82
%
(C)
International
   
15,473
     
26.71
%
(D)
   
13,045
     
27.81
%
(D)
 
               
 
               
 
Total selling expenses
   
113,542
     
35.59
%
 
   
108,714
     
36.19
%
 
 
               
 
               
 
General & administrative expenses
   
40,170
     
12.59
%
 
   
34,852
     
11.60
%
 
Restructuring charge
   
764
     
0.24
%
 
   
1,725
     
0.57
%
 
 
               
 
               
 
Income from operations
   
19,772
     
6.20
%
 
   
19,920
     
6.63
%
 
Interest expense
   
31,357
     
9.83
%
 
   
35,787
     
11.91
%
 
Loss on extinguishment of debt
   
-
         
 
   
13,376
         
  
Other income
   
(2,250
)
   
-0.71
%
 
   
(2,827
)
   
-0.94
%
 
 
               
 
               
 
Loss before provision for income taxes
   
(9,335
)
   
-2.93
%
 
   
(26,416
)
   
-8.79
%
 
Benefit from income taxes
   
(2,769
)
   
-0.87
%
 
   
(9,436
)
   
-3.14
%
 
Loss from continuing operations
   
(6,566
)
   
-2.07
%
 
   
(16,980
)
   
-5.66
%
 
 
               
 
               
Loss from discontinued operations, net of income taxes
   
(45
)
   
-0.01
%
 
   
(74
)
   
-0.02
%
 
Net loss
 
$
(6,611
)
   
-2.07
%
 
 
$
(17,054
)
   
-5.68
%
 
 

(A) Includes purchase accounting costs that are reflected in the unallocated/corporate/other column within the segment disclosure of the Company's 10-Q.
(B) Retail selling expenses as a percentage of retail sales.
(C) Wholesale selling expenses as a percentage of wholesale sales.
(D) International selling expenses as a percentage of international sales.
8

Yankee Holding Corp. And Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)

ASSETS
 
June 29,
   
December 29,
 
 
 
2013
   
2012
 
 
 
   
 
Current Assets:
 
   
 
Cash
 
$
3,784
   
$
39,979
 
Accounts receivable, net
   
52,324
     
63,572
 
Inventory
   
108,284
     
77,969
 
Prepaid expenses and other current assets
   
26,713
     
4,882
 
Deferred tax assets
   
8,564
     
6,814
 
Total Current Assets
   
199,669
     
193,216
 
Property and Equipment, net
   
128,114
     
121,553
 
Deferred Financing Costs
   
11,399
     
12,799
 
Other Assets
   
914,479
     
913,929
 
Total Assets
 
$
1,253,661
   
$
1,241,497
 
 
               
LIABILITIES AND STOCKHOLDER'S EQUITY
               
 
               
Current Liabilities:
               
Accounts payable
 
$
23,652
   
$
25,309
 
Accrued payroll
   
9,049
     
13,680
 
Accrued income taxes
   
-
     
7,110
 
Other accrued liabilities
   
46,882
     
55,395
 
Total Current Liabilities
   
79,583
     
101,494
 
Long-Term Debt
   
896,821
     
846,174
 
Deferred Rent
   
13,254
     
12,886
 
Deferred Tax Liabilities
   
118,346
     
117,135
 
Other Long-Term Liabilities
   
10,362
     
9,678
 
Stockholder's Equity
   
135,295
     
154,130
 
Total Liabilities And Stockholder's Equity
 
$
1,253,661
   
$
1,241,497
 

9

Yankee Holding Corp.
June 29, 2013  Earnings Release
Supplemental Data

 
 
Quarter
     
Year to Date
     
Total
 
YCC Retail Stores
   
4
 
(5) 
   
(7
)
(5) 
   
561
 
Wholesale Customer Locations - North America
   
(211
)
     
7,068
 
(5) 
   
34,852
 
Wholesale Customer Locations - Europe
   
257
       
470
       
6,378
 
Square Footage - Gross
   
5,542
 
(5) 
   
(12,425
)
(5) 
   
1,057,726
 
Square Footage - Selling
   
2,633
 
(5) 
   
(10,869
)
(5) 
   
808,268
 
Total Comp Stores & Consumer Direct Sales Change %
   
5.2
%
     
7.8
%
         
YCC Retail Comp Store Count
   
543
       
543
       
543
 
Sales per Square Foot (1)
           
$
539
           
Store Count
             
546
           
Average store square footage, gross (2)
             
1,624
           
Average store square footage, selling (2)
             
1,227
           
Gross Profit (3) (6)
                           
Retail $
 
$
54,158
     
$
109,935
           
Retail %
   
62.4
%
     
62.5
%
         
Wholesale $
 
$
19,603
     
$
41,016
           
Wholesale %
   
47.2
%
     
48.2
%
         
International $
 
$
10,052
     
$
23,296
           
International %
   
36.8
%
     
40.2
%
         
Segment Profit (3) (6)
                           
Retail $
 
$
8,581
     
$
17,887
           
Retail %
   
9.9
%
     
10.2
%
         
Wholesale $
 
$
16,516
     
$
34,995
           
Wholesale %
   
39.8
%
     
41.1
%
         
International $
 
$
2,650
     
$
7,823
           
International %
   
9.7
%
     
13.5
%
         
Depreciation & Amortization (3)
 
$
7,506
     
$
15,133
           
Inventory per Store (2)
           
$
35,823
           
Inventory Turns (4)
             
3.2
           
Capital Expenditures (3)
 
$
8,181
     
$
20,116
           

(1) Trailing 12 months, stores open for full 12 months, excluding S. Deerfield/Williamsburg Flagships.

(2) Excludes S. Deerfield/Williamsburg Flagships.

(3) Dollars in thousands.

(4) Based on a 13 month average inventory divided by 12 month rolling COGS.

(5) Net of closures.

(6) Includes purchase accounting costs that are reflected in the unallocated/corporate/other column within the segment disclosure of the Company's 10-Q.
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Reconciliation of Adjusted EBITDA

In addition to the results reported in accordance with generally accepted accounting principles in the United States of America (GAAP), the Company has provided information regarding “Adjusted EBITDA,” as defined, which is a non-GAAP financial measure.  Adjusted EBITDA is defined as earnings/loss from continuing operations before interest, taxes, depreciation and amortization adjusted to remove the effects of equity-based compensation, MDP advisory fees, purchase accounting, restructuring, loss on debt extinguishment and realized (gains) losses on foreign currency transactions, loss on store closings and equipment disposals and certain other non-recurring items.  Adjusted EBITDA is not intended to represent cash flow from operations as defined by GAAP and should not be used as an alternative to net income (loss) as an indicator of operating performance or to cash flow as a measure of liquidity.  We believe the presentation of Adjusted EBITDA provides useful information to investors regarding our results of operations because such presentation assists in analyzing and benchmarking the performance value of our business.  We believe Adjusted EBITDA is useful to investors because it helps enable investors to evaluate our business in the same manner as our management evaluates our business, and because this measure is frequently used by securities analysts, investors and other interested parties in the evaluation of companies with substantial financial leverage.  In addition, because Adjusted EBITDA facilitates internal comparisons of our historical operating performance on a more consistent basis, we also use Adjusted EBITDA for business planning purposes, to incent and compensate our management personnel and to measure our performance relative to that of our competitors.  While Adjusted EBITDA is frequently used as a measure of operating performance and the ability to meet debt service requirements, it is not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the method of calculation.  In evaluating our operating performance these measures should be used in conjunction with GAAP measures.
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Adjusted EBITDA is calculated as follows:
 
   
   
   
 
 
 
   
   
   
 
 
 
Thirteen
Weeks Ended
   
Thirteen
Weeks Ended
   
Twenty-Six
Weeks Ended
   
Twenty-Six
Weeks Ended
 
 
 
June 29, 2013
   
June 30, 2012
   
June 29, 2013
   
June 30, 2012
 
 
 
   
   
   
 
Net loss
 
$
(4,878
)
 
$
(13,541
)
 
$
(6,611
)
 
$
(17,054
)
Loss from discontinued operations, net of income taxes
   
21
     
31
     
45
     
74
 
Benefit from income taxes
   
(2,521
)
   
(7,515
)
   
(2,769
)
   
(9,436
)
Interest expense, net - excluding amortization of deferred financing fees
   
13,797
     
15,127
     
27,448
     
29,762
 
Amortization of deferred financing fees
   
1,086
     
1,244
     
2,152
     
2,284
 
Depreciation
   
6,351
     
6,395
     
12,843
     
12,732
 
Amortization
   
70
     
85
     
138
     
1,308
 
 
                               
EBITDA from continuing operations
   
13,926
     
1,826
     
33,246
     
19,670
 
Equity-based compensation
   
165
     
220
     
323
     
424
 
MDP advisory fees
   
375
     
375
     
750
     
750
 
Purchase accounting (a)
   
437
     
280
     
578
     
814
 
Restructuring (b)
   
-
     
1,070
     
764
     
1,725
 
Loss on extinguishment of debt (c)
   
-
     
13,376
     
79
     
13,376
 
Realized (gains) losses on foreign currency (d)
   
(445
)
   
426
     
(490
)
   
863
 
Loss on store closings and disposals of equipment
   
147
     
15
     
147
     
44
 
Certain non-recurring items (e)
   
99
     
463
     
348
     
515
 
 
                               
Adjusted EBITDA
 
$
14,704
   
$
18,051
   
$
35,745
   
$
38,181
 

(a) Represents purchase accounting adjustments as a result of the merger in 2007.

(b) For 2013, includes costs for employee related severance costs and costs to close a satellite office in Germany associated with restructuring of the International operations during the first quarter of 2013.  For 2012, includes costs for employee severance associated with restructuring the wholesale and retail operations and changes in the internal reporting structure during the first quarter of 2012; and costs associated with the consolidation and relocation of our logistics operations and corporate headquarters for our foreign subsidiary during the second quarter of 2012.

(c) For 2013, represents loss on extinguishment of debt attributable to the redemption of the remaining $10.0 million outstanding of Yankee Candle’s Senior Notes that occurred during the first quarter of 2013. For 2012, represents loss on extinguishment of debt attributable to the refinancing of the $338.1 million outstanding under the prior Senior Secured Credit Facility and $315.0 million of Senior Notes due 2015 that occurred during the second quarter of 2012.

(d) Represents transaction (gains) losses on settlements of our intercompany receivable with our foreign subsidiary and transaction (gains) losses from foreign vendors and customers.

(e) Represents costs associated with the implementation of our new European enterprise resource planning (“ERP”) system and warehouse moving costs.
 
 
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