Diamond Foods, Inc. announced on March 24, 2013, that the Audit Committee of the Board of Directors approved the dismissal of Deloitte & Touche LLP as the Company’s independent registered public accountant. On March 24, 2013, the Audit Committee of Diamond Foods, Inc. approved the appointment of PricewaterhouseCoopers LLP as the Company’s new independent registered public accounting firm, effective immediately, to perform independent audit services for the fiscal year ending July 31, 2013.

Diamond Foods, Inc. derivative litigation, C.A. No. 7657-CS, entered an order dismissing the derivative complaint before it. In this case, two derivative plaintiffs, an individual and a pension fund, filed a derivative suit against the directors and officers of Diamond Foods, Inc. The plaintiffs allege that, in a period between October 2010 and June 2012, two defendants, Diamond's former CEO and former CFO, breached their fiduciary duties by engaging in a manipulation of the company's financial statements. Moreover, the plaintiffs asserted actions against the additional defendants, former directors of the company, for failing to try in good faith to ensure that the company operated in compliance with the law. Defendants brought a motion to dismiss or stay the case under the McWane doctrine. First, the California Federal Action filed by the Dual Forum Plaintiffs was dismissed by the Northern District of California for lack of subject matter jurisdiction. The court found that the federal claim asserted therein failed as a matter of law. With the federal claims dismissed, the court found that it had no jurisdiction over the suit and did not consider any of the state law claims. One of those plaintiffs has appealed that decision, but just weeks after noticing the appeal, the plaintiffs filed a nearly identical complaint with the Delaware Court of Chancery, without the federal law claims. Thus, the plaintiffs seek to have the dismissal of the California Federal Action overturned and to proceed in the U.S. District Court for the Northern District of California not only with their federal claims but with the same claims as those asserted in this action.

Diamond Foods, Inc. reported consolidated earnings results for the second quarter and six months ended January 31, 2013. For the quarter, the company reported income from operations was $24,634,000, income before income taxes was $10,403,000, net income of $10,141,000 or $0.43 diluted per share on net sales of $220,844,000 against loss from operations was $16,111,000, loss before income taxes was $22,582,000, net loss of $20,184,000 or $0.93 diluted loss per share on net sales of $262,351,000 for the same period a year ago. Non-GAAP loss before income taxes was $1,569,000, net income of $1,142,000 or $0.05 diluted per share against Non-GAAP income before income taxes was $219,000, net income of $233,000 or $0.01 diluted per share for the same period a year ago. Adjusted EBITDA was $22,948,000 against $16,555,000 for the same period a year ago. Capital expenditures were $1.6 million for the second quarter of fiscal 2013. For the six months, the company reported income from operations was $28,438,000, income before income taxes was $295,000, net loss of $588,000 or $0.03 diluted loss per share on net sales of $479,306,000 against loss from operations was $14,189,000, loss before income taxes was $26,421,000, net loss of $9,383,000 or $0.43 diluted loss per share on net sales of $549,744,000 for the same period a year ago. Non-GAAP income before income taxes was $6,661,000, net income of $6,291,000 or $0.26 diluted per share against Non-GAAP income before income taxes was $15,610,000, net income of $16,578,000 or $0.75 diluted per share for the same period a year ago. Adjusted EBITDA was $53,950,000 against $46,352,000 for the same period a year ago.