ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations FISCAL 2019 COMPARED TO FISCAL 2018 21 The following table is a reconciliation of financial results by segment, as reported, to adjusted financial results by segment, excluding business optimization charges, pension settlement charges, product liability litigation charges, major retailer bankruptcy bad debt expense, charges as a result of the implementation of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”), and senior note repurchase premiums (in thousands, except per share data): For the fiscal year ended June 2019 Reported Adjustments (1) 2019 Adjusted (3) 2018 Reported Adjustments (2) 2018 Adjusted (3) Gross Profit: Engines $ 193,069 $ 2,662 $ 195,731 $ 252,645 $ 2,854 $ 255,499 Products 108,984 9,207 118,191 144,933 3,775 148,708 Inter-Segment Eliminations (1,002) — (1,002) 504 — 504 Total $ 301,051 $ 11,869 $ 312,920 $ 398,082 $ 6,628 $ 404,710 Engineering, Selling, General and Administrative Expenses: Engines $ 213,589 $ 23,374 $ 190,215 $ 248,286 $ 48,096 $ 200,190 Products 135,687 13,441 122,246 126,944 4,339 122,605 Total $ 349,276 $ 36,815 $ 312,461 $ 375,230 $ 52,435 $ 322,796 Equity in Earnings of Unconsolidated Affiliates Engines $ 5,001 $ 3,113 $ 8,114 $ 5,234 $ 2,964 $ 8,198 Products 4,028 — 4,028 4,023 — 4,023 Total $ 9,029 $ 3,113 $ 12,142 $ 9,257 $ 2,964 $ 12,221 Segment Income (Loss) (4): Engines $ (15,519) $ 29,149 $ 13,630 $ 9,593 $ 53,913 $ 63,506 Products (22,675 ) 22,648 (27 ) 22,012 8,113 30,125 Inter-Segment Eliminations (1,002) — (1,002) 504 — 504 Total $ (39,196 ) $ 51,797 $ 12,601 $ 32,109 $ 62,026 $ 94,135 Interest Expense $ (29,242 ) $ 263 $ (28,979 ) $ (25,320 ) $ 2,228 $ (23,092 ) Other Income $ 340 $ 521 $ 861 $ 4,312 $ — $ 4,312 Income (Loss) Before Income Taxes (68,098) 52,581 (15,517) 11,101 64,254 75,355 Provision (Credit) for Income Taxes (14,015 ) 11,362 (2,653 ) 22,421 (2,836 ) 19,585 Net Income (Loss) $ (54,083) $ 41,219 $ (12,864) $ (11,320) $ 67,090 $ 55,770 Earnings (Loss) Per Share Basic $ (1.31 ) $ 0.99 $ (0.32 ) $ (0.28 ) $ 1.57 $ 1.29 Diluted (1.31) 0.99 (0.32) (0.28) 1.57 1.29