This excerpt taken from the DWRI 8-K filed May 14, 2008.
Non-GAAP Financial Information
This press release presents product margin, which is a non-GAAP financial measure within the meaning of applicable SEC rules and regulations. The Company believes product margin is a useful financial measure as it removes the impact of shipping revenues and expenses from gross margin. Management believes shipping operations do not reflect the core operations of Design Within Reachs business and do not represent a profit center as shipping margins are expected to trend to zero. For a reconciliation of product margin to the most comparable GAAP measure, see the following reconciliation of GAAP gross margin to product margin.