Product Recall

In January 2013, the Company announced a voluntary product recall of certified organic and made with organic pizza products due to the possible presence of fragments of flexible metal mesh from a faulty screen at a third-party flour mill. The Company initiated the recall of all lots of pizza product manufactured with this supplier’s flour from its first purchase from the supplier in May 2012.

The Company recorded the estimated customer and consumer returns as a reduction of net sales, related costs associated with product returns, destruction charges, inventory write-off and costs incurred by contract manufacturers as cost of sales, and administrative costs associated with the recall such as legal expenses as selling, general and administrative expenses. The Company recorded $1.9 million and $0.4 million for insurance recoveries in connection with the product recall in the years ended March 31, 2014 and 2013, respectively. The impact of recall-related charges and related insurance recoveries is as follows (in thousands except per share amounts):



	Fiscal Year Ended March 31,
	2014			2013
Benefit to / (reduction of) net sales	$	1,071		$	(1,096	)
Benefit to / (incremental) cost of sales	628			(1,080		)
Benefit to / (incremental) selling, general and administrative expenses	(24		)	(171		)
Total benefit to / (reduction of) income before income taxes	$	1,675		$	(2,347	)
Benefit to / (reduction of) net income	$	992		$	(1,364	)
Benefit to / (reduction of) net income per diluted share	$	0.06		$	(0.08	)

The Company does not expect any significant further costs or recoveries associated with the voluntary product recall.