##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended January 31, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For
the transition period fromto
 Commission File Number: 000-51439
 DIAMOND FOODS, INC.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    20-2556965(State of Incorporation)
    
    (IRS Employer Identification No.)600 Montgomery Street, 17th FloorSan Francisco, California
    
    94111-2702(Address of Principal Executive Offices)
    
    (Zip Code)415-912-3180(Telephone No.)
 þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



TABLE OF CONTENTS
 PagePart I. FINANCIAL INFORMATIONItem 1. Financial Statements
    
    4Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    15Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    19Item 4. Controls and Procedures
    
    20Part II.OTHER INFORMATIONItem 1. Legal Proceedings
    
    20Item 1A. Risk Factors
    
    20Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    21Item 3. Defaults Upon Senior Securities
    
    21Item 4. Submission of Matters to a Vote of Security Holders
    
    21Item 5. Other Information
    
    21Item 6. Exhibits
    
    22SIGNATURE
    
    23EX-31.01EX-31.02EX-32.01
  2




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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
   3




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 DIAMOND FOODS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share information)
(Unaudited)
 January 31,
    
    
    July 31,
    
    
    January 31,2009
    
    
    2008
    
    
    2008ASSETSCurrent assets:Cash and cash equivalents
    
    $
    2,194
    
    
    $
    74,279
    
    
    $
    58,963Trade receivables, net
    
    
    47,981
    
    
    
    46,256
    
    
    
    32,707Inventories
    
    
    158,846
    
    
    
    88,526
    
    
    
    155,733Deferred income taxes
    
    
    7,387
    
    
    
    7,387
    
    
    
    4,805Prepaid expenses and other current assets
    
    
    3,179
    
    
    
    4,261
    
    
    
    2,426Total current assets
    
    
    219,587
    
    
    
    220,709
    
    
    
    254,634Property, plant and equipment, net
    
    
    50,146
    
    
    
    34,606
    
    
    
    34,712Deferred income taxes
    
    
    4,213
    
    
    
    5,802
    
    
    
    5,092Goodwill
    
    
    77,916
    
    
    
    5,432
    
    
    
    5,432Other intangible assets, net
    
    
    100,101
    
    
    
    3,473
    
    
    
    3,590Other long-term assets
    
    
    4,246
    
    
    
    3,245
    
    
    
    4,803Total assets
    
    $
    456,209
    
    
    $
    273,267
    
    
    $
    308,263LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Revolving line of credit
    
    $
    15,000
    
    
    $
    
    
    
    $
    Current portion of long-term debt
    
    
    12,500
    
    
    
    
    
    
    
    Accounts payable and accrued liabilities
    
    
    61,456
    
    
    
    42,251
    
    
    
    36,316Payable to growers
    
    
    88,017
    
    
    
    56,942
    
    
    
    105,555Total current liabilities
    
    
    176,973
    
    
    
    99,193
    
    
    
    141,871Long-term obligations
    
    
    107,655
    
    
    
    20,204
    
    
    
    20,261Other liabilities
    
    
    7,701
    
    
    
    7,647
    
    
    
    7,336Stockholders equity:Preferred stock, $0.001 par value; Authorized: 5,000,000 shares; no shares
issued or outstanding
    
    
    
    
    
    
    
    
    
    
    Common stock, $0.001 par value; Authorized: 100,000,000 shares; 16,575,473,
16,340,076 and 16,145,551 shares issued and 16,384,668, 16,180,771 and 16,053,000 shares
outstanding
at January 31, 2009, July 31, 2008 and January 31, 2008, respectively
    
    
    17
    
    
    
    16
    
    
    
    16Treasury
stock, at cost: 190,805, 159,305 and 92,551 shares held at January 31, 2009, July 31, 2008 and January 31, 2008, respectively
    
    
    (3,966
    )
    
    
    (3,203
    )
    
    
    (1,588
    )Additional paid-in capital
    
    
    116,248
    
    
    
    112,550
    
    
    
    105,139Accumulated other comprehensive income
    
    
    940
    
    
    
    1,584
    
    
    
    2,230Retained earnings
    
    
    50,641
    
    
    
    35,276
    
    
    
    32,998Total stockholders equity
    
    
    163,880
    
    
    
    146,223
    
    
    
    138,795Total liabilities and stockholders equity
    
    $
    456,209
    
    
    $
    273,267
    
    
    $
    308,263
  4




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DIAMOND FOODS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share information)
(Unaudited)
 Three Months
    
    Six MonthsEnded January 31,
    
    Ended January 31,2009
    
    2008
    
    2009
    
    2008Net sales
    
    $
    150,588
    
    
    $
    133,798
    
    
    $
    346,114
    
    
    $
    318,335Cost of sales
    
    
    116,622
    
    
    
    111,371
    
    
    
    271,079
    
    
    
    266,359Gross profit
    
    
    33,966
    
    
    
    22,427
    
    
    
    75,035
    
    
    
    51,976Operating expenses:Selling, general and administrative
    
    
    15,914
    
    
    
    10,441
    
    
    
    31,686
    
    
    
    21,829Advertising
    
    
    6,210
    
    
    
    7,439
    
    
    
    12,060
    
    
    
    11,795Total operating expenses
    
    
    22,124
    
    
    
    17,880
    
    
    
    43,746
    
    
    
    33,624Income from operations
    
    
    11,842
    
    
    
    4,547
    
    
    
    31,289
    
    
    
    18,352Interest expense
    
    
    2,157
    
    
    
    233
    
    
    
    3,606
    
    
    
    584Other expense, net
    
    
    
    
    
    
    
    
    
    
    898
    
    
    
    Income before income taxes
    
    
    9,685
    
    
    
    4,314
    
    
    
    26,785
    
    
    
    17,768Income taxes
    
    
    3,541
    
    
    
    1,640
    
    
    
    9,945
    
    
    
    6,752Net income
    
    $
    6,144
    
    
    $
    2,674
    
    
    $
    16,840
    
    
    $
    11,016Earnings per share:Basic
    
    $
    0.38
    
    
    $
    0.17
    
    
    $
    1.03
    
    
    $
    0.69Diluted
    
    $
    0.37
    
    
    $
    0.17
    
    
    $
    1.01
    
    
    $
    0.69Shares used to compute earnings per share:Basic
    
    
    16,377
    
    
    
    16,044
    
    
    
    16,343
    
    
    
    16,019Diluted
    
    
    16,687
    
    
    
    16,101
    
    
    
    16,672
    
    
    
    16,048
  5




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DIAMOND FOODS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 Six Months Ended January 31,2009
    
    
    2008CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    16,840
    
    
    $
    11,016Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    4,834
    
    
    
    3,138Stock-based compensation
    
    
    2,167
    
    
    
    3,099Deferred income taxes
    
    
    1,589
    
    
    
    Changes in assets and liabilities (excluding business acquired):Trade receivables
    
    
    (1,725
    )
    
    
    17,955Inventories
    
    
    (63,503
    )
    
    
    (65,114
    )Accounts payable and accrued liabilities
    
    
    15,350
    
    
    
    9,829Payable to growers
    
    
    31,075
    
    
    
    48,438Other, net
    
    
    1,897
    
    
    
    1,367Net cash provided by operating activities
    
    
    8,524
    
    
    
    29,728CASH FLOWS FROM INVESTING ACTIVITIES:Proceeds from sale of assets
    
    
    63
    
    
    
    Purchase of property, plant and equipment
    
    
    (2,684
    )
    
    
    (3,758
    )Acquisition of Pop Secret business
    
    
    (190,224
    )
    
    
    Net cash used in investing activities
    
    
    (192,845
    )
    
    
    (3,758
    )CASH FLOWS FROM FINANCING ACTIVITIES:Revolving line of credit borrowings, net
    
    
    15,000
    
    
    
    Proceeds from issuance of long-term debt
    
    
    125,000
    
    
    
    Payment of long-term debt
    
    
    (25,085
    )
    
    
    (102
    )Debt issuance costs
    
    
    (1,973
    )
    
    
    Other, net
    
    
    (706
    )
    
    
    (660
    )Net cash provided by (used in) financing activities
    
    
    112,236
    
    
    
    (762
    )Net increase (decrease) in cash and cash equivalents
    
    
    (72,085
    )
    
    
    25,208Cash and cash equivalents:Beginning of period
    
    
    74,279
    
    
    
    33,755End of period
    
    $
    2,194
    
    
    $
    58,963Supplemental disclosure of cash flow information:Cash paid during the period for:Interest
    
    $
    3,810
    
    
    $
    706Income taxes
    
    
    8,181
    
    
    
    272Non-cash investing activity:Accrued capital expenditures
    
    
    138
    
    
    
    131Liabilities related to Pop Secret acquisition
    
    
    3,500
    
    
    
    
  6




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DIAMOND FOODS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended January 31, 2009 and 2008
(In thousands, except share and per share information, unaudited)
 (1) Organization and Basis of Presentation
    (2) Recent Accounting Pronouncements
 Determining Whether Instruments Granted in Share-Based Payment Transactions
are Participating Securities.
 Disclosures about Derivative Instruments and Hedging Activities
  7




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(3) Fair Value Measurements
 Fair Value Measurements The
Effective Date of FASB Statement No. 157
  Determining the Fair Value of a Financial Asset
When the Market for That Asset Is Not Active
   Level 1
 Level 2
 Level 3
   The Fair Value Option for
Financial Assets and Financial Liabilities  Including an amendment of FASB Statement No. 115
 8




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(4) Stock Plan Information
 Share-Based Payment Accounting for Stock Issued to
Employees
 Stock Option Awards:
 Three Months
    
    Six MonthsEnded January 31,
    
    Ended January 31,2009
    
    2008
    
    2009
    
    2008Average expected life, in years
    
    
    6
    
    
    
    6
    
    
    
    6
    
    
    
    6Expected volatility
    
    
    36.00
    %
    
    
    30.00
    %
    
    
    36.00
    %
    
    
    30.00
    %Risk-free interest rate
    
    
    2.78
    %
    
    
    3.98
    %
    
    
    3.28
    %
    
    
    4.28
    %Dividend rate
    
    
    0.73
    %
    
    
    0.91
    %
    
    
    0.70
    %
    
    
    0.94
    %
  Weighted averageWeighted average
    
    
    remaining
    
    
    Aggregate intrinsicNumber of Shares
    
    
    exercise price per
    
    
    contractual life (in
    
    
    value (in(in thousands)
    
    
    share
    
    
    years)
    
    
    thousands)Outstanding at July 31, 2008
    
    
    1,510
    
    
    $
    17.74
    
    
    
    
    
    
    $
    Granted
    
    
    48
    
    
    
    27.16
    
    
    
    
    
    
    
    Exercised
    
    
    (62
    )
    
    
    17.61
    
    
    
    
    
    
    
    Cancelled
    
    
    (9
    )
    
    
    16.88
    
    
    
    
    
    
    
    Outstanding at January 31, 2009
    
    
    1,487
    
    
    
    18.05
    
    
    
    7.1
    
    
    
    11,421Exerciseable at January 31, 2009
    
    
    1,216
    
    
    
    17.38
    
    
    
    6.8
    
    
    
    10,095
  9




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WeightedNumber of
    
    
    average grantShares
    
    
    date fair value(in thousands)
    
    
    per shareNonvested at July 31, 2008
    
    
    298
    
    
    $
    6.74Granted
    
    
    48
    
    
    
    10.36Vested
    
    
    (68
    )
    
    
    6.32Cancelled
    
    
    (7
    )
    
    
    5.79Nonvested at January 31, 2009
    
    
    271
    
    
    
    7.51
  Restricted Stock Awards:
 WeightedNumber of
    
    
    average grantShares
    
    
    date fair value(in thousands)
    
    
    per shareOutstanding at July 31, 2008
    
    
    332
    
    
    $
    17.74Granted
    
    
    194
    
    
    
    25.81Vested
    
    
    (80
    )
    
    
    18.29Cancelled
    
    
    (25
    )
    
    
    19.58Outstanding at January 31, 2009
    
    
    421
    
    
    
    21.24
   Employee Stock Purchase Plan:
 Three Months Ended January 31,2009
    
    2008Average expected life, in years
    
    
    0.75
    
    
    
    0.75Expected volatility
    
    
    30.00
    %
    
    
    30.00
    %Risk-free interest rate
    
    
    4.01
    %
    
    
    4.59
    %Dividend rate
    
    
    0.90
    %
    
    
    0.77
    %
 10




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Suspension of the ESPP Program:
 (5) Earnings Per Share
  (6) Acquisition of Pop Secret
  Business Combinations
  Inventory
    
    $
    6,817Property, plant and equipment
    
    
    17,023Brand intangibles
    
    
    62,500Customer relationships
    
    
    34,900Goodwill
    
    
    72,484Acquisition liabilities
    
    
    (3,500
    )Purchase price
    
    $
    190,224
     11




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Pro Forma  Financial Information
  Three Months Ended January 31,
    
    Six Months Ended January 31,2009
    
    2008
    
    2009
    
    2008Net sales
    
    $
    150,588
    
    
    $
    162,297
    
    
    $
    359,623
    
    
    $
    372,850Net income
    
    $
    6,144
    
    
    $
    4,439
    
    
    $
    19,273
    
    
    $
    12,393Diluted earnings per share
    
    $
    0.37
    
    
    $
    0.28
    
    
    $
    1.16
    
    
    $
    0.77
  (7) Balance Sheet Items
  January 31,
    
    
    July 31,
    
    
    January 31,2009
    
    
    2008
    
    
    2008Raw materials and supplies
    
    $
    96,731
    
    
    $
    33,501
    
    
    $
    102,103Work in process
    
    
    21,897
    
    
    
    19,084
    
    
    
    13,354Finished goods
    
    
    40,218
    
    
    
    35,941
    
    
    
    40,276Total
    
    $
    158,846
    
    
    $
    88,526
    
    
    $
    155,733
  January 31,
    
    
    July 31,
    
    
    January 31,2009
    
    
    2008
    
    
    2008Accounts payable
    
    $
    28,179
    
    
    $
    21,848
    
    
    $
    19,766Accrued promotion
    
    
    21,594
    
    
    
    8,695
    
    
    
    6,728Accrued salaries and benefits
    
    
    7,441
    
    
    
    7,886
    
    
    
    4,180Income taxes payable
    
    
    2,469
    
    
    
    
    
    
    
    4,609Other
    
    
    1,773
    
    
    
    3,822
    
    
    
    1,033Total
    
    $
    61,456
    
    
    $
    42,251
    
    
    $
    36,316
 12




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(8) Intangible Assets and Goodwill
  January 31,
    
    
    July 31,
    
    
    January 31,2009
    
    
    2008
    
    
    2008Goodwill
    
    $
    77,916
    
    
    $
    5,432
    
    
    $
    5,432Brand intangibles (not subject to amortization)
    
    
    62,500
    
    
    
    
    
    
    
    Intangible assets subject to amortization:Customer contracts and related relationships
    
    
    37,300
    
    
    
    2,400
    
    
    
    2,400Trademarks and trade names
    
    
    1,600
    
    
    
    1,600
    
    
    
    1,600Total intangible assets subject to amortization
    
    
    38,900
    
    
    
    4,000
    
    
    
    4,000Total goodwill and intangible assets, gross
    
    
    179,316
    
    
    
    9,432
    
    
    
    9,432Less accumulated amortization on intangible assets:Customer contracts and related relationships
    
    
    (985
    )
    
    
    (270
    )
    
    
    (210
    )Trademarks and trade names
    
    
    (314
    )
    
    
    (257
    )
    
    
    (200
    )Total amortization
    
    
    (1,299
    )
    
    
    (527
    )
    
    
    (410
    )Goodwill and intangible assets, net
    
    $
    178,017
    
    
    $
    8,905
    
    
    $
    9,022
  (9) Credit Facilities and Long-Term Obligations
    (10) Retirement Plans
  13




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Pension Benefits
    
    
    Other BenefitsThree Months ended
    
    
    Six Months ended
    
    
    Three Months ended
    
    
    Six Months endedJanuary, 31
    
    
    January, 31
    
    
    January, 31
    
    
    January, 312009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2009
    
    

2008Service cost
    
    $
    148
    
    
    $
    164
    
    
    $
    296
    
    
    $
    328
    
    
    $
    26
    
    
    $
    26
    
    
    $
    52
    
    
    $
    51Interest cost
    
    
    270
    
    
    
    240
    
    
    
    540
    
    
    
    481
    
    
    
    71
    
    
    
    69
    
    
    
    142
    
    
    
    139Expected return on plan assets
    
    
    (265
    )
    
    
    (287
    )
    
    
    (530
    )
    
    
    (574
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization of prior service cost
    
    
    7
    
    
    
    6
    
    
    
    14
    
    
    
    13
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization of net loss / (gain)
    
    
    13
    
    
    
    2
    
    
    
    26
    
    
    
    3
    
    
    
    (135
    )
    
    
    (133
    )
    
    
    (270
    )
    
    
    (265
    )Net periodic benefit cost / (income)
    
    $
    173
    
    
    $
    125
    
    
    $
    346
    
    
    $
    251
    
    
    $
    (38
    )
    
    $
    (38
    )
    
    $
    (76
    )
    
    $
    (75
    )
  (11) Derivatives
  Accounting for Derivative Instruments and Hedging Activities Accounting for Certain Derivative Instruments and Hedging Activities,
 (12) Contingencies
   14




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Overview
   Critical Accounting Policies
  Revenue Recognition.
 Inventories.
  15




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Valuation of Long-lived and Intangible Assets and Goodwill. Accounting for the Impairment or Disposal of Long-lived Assets Goodwill and Other Intangible Assets,
      Employee Benefits.
 Income Taxes. Accounting for
Income Taxes,
 16




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Accounting for Uncertainty in Income Taxes.
 Accounting for Stock-Based Compensation. Share-Based Payment
 Results of Operations
   Three Months ended
    
    
    
    
    
    
    Six Months endedJanuary 31,
    
    
    % Change from
    
    
    January 31,
    
    
    % Change from2009
    
    
    2008
    
    
    2008 to 2009
    
    
    2009
    
    
    2008
    
    
    2008 to 2009North American Retail (1)
    
    $
    130,802
    
    
    $
    102,652
    
    
    
    27.4
    %
    
    $
    281,283
    
    
    $
    224,717
    
    
    
    25.2
    %International
    
    
    12,854
    
    
    
    17,878
    
    
    
    -28.1
    %
    
    
    44,197
    
    
    
    64,339
    
    
    
    -31.3
    %North
American Ingredient/Food Service
    
    
    6,246
    
    
    
    12,633
    
    
    
    -50.6
    %
    
    
    19,206
    
    
    
    27,885
    
    
    
    -31.1
    %Other
    
    
    686
    
    
    
    635
    
    
    
    8.0
    %
    
    
    1,428
    
    
    
    1,394
    
    
    
    2.4
    %Total
    
    $
    150,588
    
    
    $
    133,798
    
    
    
    12.5
    %
    
    $
    346,114
    
    
    $
    318,335
    
    
    
    8.7
    %
 
 (1)
    
    North American Retail represents sales of our culinary, snack and in-shell nuts in North
America.   Three Months ended

    
    Six Months endedJanuary 31,

    
    January 31,2009

    
    2008

    
    2009

    
    2008Walnuts
    
    
    41.9
    %
    
    
    59.3
    %
    
    
    50.5
    %
    
    
    61.3
    %Other nuts and popcorn products
    
    
    58.1
    %
    
    
    40.7
    %
    
    
    49.5
    %
    
    
    38.7
    %Total
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
  17




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##### Table of Contents



Gross profit.
 Selling, General and Administrative.
 Advertising.
 Interest expense.
 Income taxes.
 Liquidity and Capital Resources
      18




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##### Table of Contents



Contractual Obligations and Commitments
  Payments Due by PeriodLess than
    
    
    1-3
    
    
    3-5
    
    
    More thanTotal
    
    
    1 Year (d)
    
    
    Years
    
    
    Years
    
    
    5 YearsRevolving line of credit
    
    $
    15.0
    
    
    $
    
    
    
    $
    15.0
    
    
    $
    
    
    
    $
    Long-term obligations
    
    
    120.2
    
    
    
    5.0
    
    
    
    47.7
    
    
    
    67.5
    
    
    
    Interest on long-term obligations (a)
    
    
    10.5
    
    
    
    1.7
    
    
    
    6.9
    
    
    
    1.9
    
    
    
    Operating leases
    
    
    11.5
    
    
    
    1.0
    
    
    
    5.0
    
    
    
    3.1
    
    
    
    2.4Purchase commitments (b)
    
    
    1.1
    
    
    
    1.1
    
    
    
    
    
    
    
    
    
    
    
    Other long-term liabilities (c)
    
    
    6.9
    
    
    
    0.1
    
    
    
    0.5
    
    
    
    0.5
    
    
    
    5.8Total
    
    $
    165.2
    
    
    $
    8.9
    
    
    $
    75.1
    
    
    $
    73.0
    
    
    $
    8.2
 
 (a)
    
    Amounts represent the expected cash interest payments on our long-term debt. Interest on our
variable rate debt was forecasted using a LIBOR forward curve analysis as of January 31, 2009.(b)
    
    Commitments to purchase equipment. Excludes purchase commitments under Walnut and Corn
Purchase Agreements.(c)
    
    Excludes $0.6 million in deferred rent liabilities, $0.1 million of non-current FIN 48 tax
liabilities and $0.1 million of other non-current liabilities.(d)
    
    Represents obligations and commitments for the remaining six months of fiscal year 2009. Effects of Inflation
  Recent Accounting Pronouncements
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  19




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##### Table of Contents



Item 4. Controls and Procedures
    
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
   
 Item 1A. Risk Factors
  20




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##### Table of Contents



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  Total number of
    
    
    Approximate DollarTotal number
    
    
    Average price
    
    
    shares repurchased as
    
    
    value of sharesof shares
    
    
    paid per
    
    
    part of publicly
    
    
    that may yet be purchasedPeriod
    
    repurchased (1)
    
    
    share
    
    
    announced plans
    
    
    under the plansRepurchases from November 1 - November 30, 2008
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    $Repurchases from December 1 - December 31, 2008
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    $Repurchases from January 1 - January 31, 2009
    
    
    7,915
    
    
    $
    21.48
    
    
    
    
    
    
    
    $Total
    
    
    7,915
    
    
    $
    21.48
    
    
    
    
    
    
    
    $
 
 (1)
    
    All of the shares in the table above were originally granted to employees as restricted stock
pursuant to our 2005 Equity Incentive Plan (EIP). Pursuant to the EIP, all of the shares
reflected above were relinquished by employees in exchange for Diamonds agreement to pay
federal and state withholding obligations resulting from the vesting of the restricted stock.
The repurchases reflected above were not made pursuant to a publicly announced plan. 
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  1.
    
    To elect three Class I directors, each to serve until our 2012 annual meeting of
stockholders and until his successor has been elected and qualified or until his earlier
resignation, death or removal.
  VotesFor
    
    Withheld
    
    Abstentions
    
    Broker Non-VotesMichael J. Mendes
    
    
    12,398,198
    
    
    
    1,125,634
    
    
    
    
    
    
    
    Laurence M. Baer
    
    
    12,642,336
    
    
    
    881,496
    
    
    
    
    
    
    
    Joseph P. Silveira
    
    
    12,561,607
    
    
    
    962,225
    
    
    
    
    
    
    
    
 2.
    
    To ratify the appointment of Deloitte & Touche LLP as our independent registered public
accounting firm for the fiscal year ending July 31, 2009.
  VotesFor
    
    Against
    
    Withheld
    
    Abstentions
    
    Broker Non-Votes13,368,754
    
    
    100,313
    
    
    
    
    
    54,765
    
    
    
  
 Item 5. Other Information
  21




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##### Table of Contents



Item 6. Exhibits
  Filed with this
    
    Incorporated by referenceNumber
    
    Exhibit Title
    
    10-Q
    
    Form
    
    File No.
    
    Date Filed31.01
    
    Certification of Chief Executive Officer pursuant to
Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
    
    X31.02
    
    Certification of Chief Financial Officer pursuant to
Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
    
    X32.01
    
    Certifications of Chief Executive Officer and Chief
Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
    
    X
 22




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##### Table of Contents



SIGNATURES
  DIAMOND FOODS, INC.Date: March 11, 2009
    
    By:
    
    /s/ Steven M. Neil

Steven M. NeilChief Financial and Administrative Officerand duly authorized officer
 23