10.Subsequent Event

On April 23, 2015, we announced a voluntary product recall of certain varieties of the Company’s Fresh FrozenTM line of frozen vegetables, as well as select varieties of our Jamba® “At Home” line of smoothie kits because our Jefferson, Georgia facility tested positive for Listeria monocytogenes. The impacts recorded in our consolidated statement of operations attributable to the recall for the quarter ended March 28, 2015 are summarized as follows (in thousands):

	Increase / (Decrease)
Net revenues	$	—
Cost of revenues (1)	15,260
Gross profit	(15,260		)
Operating expenses:
Selling, general & administrative expenses (2)	233
Impairment of intangible asset (3)	9,277
Operating loss	(24,770		)
Interest expense, net	—
Loss before income taxes	(24,770		)
Income tax benefit	8,882
Net loss	$	(15,888	)

(1)

Additional cost of revenues primarily reflects the write-down of approximately $4.9 million of inventory on hand and a provision of approximately $10.4 million for additional costs estimated to be incurred related to the recall, including product expected to be returned from customers and consumers.

(2)

Additional selling, general & administrative costs consists of approximately $0.2 million to record additional accounts receivable reserves.

(3)

Amount reflects a $9.3 million impairment charge recorded to write-off the carrying value of the Fresh Frozen customer relationships intangible asset.

We expect there will be additional costs related to this recall recorded subsequent to the quarter ended March 28, 2015. To the extent that the Company is able to recover losses related to the recall through its insurance policies, such charges will be reversed in the period in which such recovery is determined to be probable, or in the period that the claim is resolved, depending upon the nature of the applicable loss; however, we can provide no assurance as to the likelihood, extent (if any) or timing of any such recovery. Additionally, while it is too soon to reliably estimate the impact of this recall on the Company’s future sales of the Fresh FrozenTM brand and the Jamba® “At Home” line of smoothie kits, net revenues of the products affected by the recall are expected to be reduced for the second fiscal quarter of 2015 and potentially subsequent quarterly periods.

Additional details of the recall, including a listing of the specific products affected, are available on the Company’s website at www.inventurefoods.com/information/frozenrecall.