INDIANAPOLIS, Sept. 24 /PRNewswire-FirstCall/ -- The Finish Line, Inc. (Nasdaq: FINL) today reported results for its second fiscal quarter, representing the 13-week period ended August 29, 2009. As previously disclosed, the company exited the Man Alive business effective July 4, 2009. Therefore, all financial results of the Man Alive operations are included in discontinued operations for all periods presented.
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Second Quarter Results
Comparable store sales declined 9.9% in the second quarter compared to a 4.9% increase last year. Net sales declined 11.4% to $298.7 million for the period compared to $337.0 million as a result of fewer stores and the comparable store sales decline.
Finish Line reported income from continuing operations of $11.7 million, or $0.21 per diluted share, compared to income from continuing operations of $14.9 million, or $0.27 per diluted share, in the second quarter last year. Diluted weighted average shares outstanding for the second quarter were 54.6 million versus 54.3 million for the same period a year ago.
Consolidated merchandise inventories were reduced 18% to $221.4 million as of August 29, 2009 compared to $269.9 million a year ago. Finish Line inventory declined 13.4% overall and 10.1% on a per-square-foot basis.
At quarter end, the company had no interest-bearing debt and $142.9 million in cash and cash equivalents, up from $65.0 million at the end of the second quarter a year ago.
"In the second quarter, we continued to manage the business conservatively by controlling costs and increasing efficiencies, but we also made and will continue to make appropriate investments in our business to drive sales and profitable growth," said Finish Line Chief Executive Officer Glenn Lyon. "Our online business and cross-channel strategies are growing, and we are focused on building upon that growth by improving the customer experience wherever and whenever they shop with us. Overall, our focus at Finish Line is to sustain the health of our balance sheet, maintain our premium brand position, and within the realities of what remains a cautious consumer environment, position ourselves for future profit growth."
Year-to-Date Results
For the 26 weeks ended August 29, 2009, Finish Line reported income from continuing operations of $13.5 million, or $0.24 per diluted share, versus income from continuing operations of $17.3 million, or $0.32 per diluted share for the same period a year ago.
Year-to-date comparable store sales declined 7.2% versus a 3.4% increase last year. Net sales declined 8.6% to $557.8 million, compared to $610.0 million a year ago.
Conference Call
The Company will host a conference call for investors Friday, September 25 at 8:30 a.m. EDT. To participate in the call, dial (660) 422-4970, conference ID#29769719. To listen online, visit www.finishline.com. A replay of the conference call can be accessed at (706) 645-9291, conference ID#29769719. This replay will be available beginning at approximately 9:45 a.m. EDT Friday, September 25, and will remain available through Monday, September 28. In addition, the replay will be available on the Web at www.finishline.com.
Forward Looking Statements
The company has experienced, and expects to continue to experience, significant variability in net sales, net income (loss) and comparable store net sales from quarter to quarter. Therefore, the results of the periods presented herein are not necessarily indicative of the results to be expected for any other future period or year.
Certain statements contained in this press release regard matters that are not historical facts and are forward looking statements (as such term is defined in the rules promulgated pursuant to the Securities Act of 1933, as amended). Because such forward looking statements contain risks and uncertainties, actual results may differ materially from those expressed in or implied by such forward looking statements.
Factors that could cause results of the company to differ materially include, but are not limited to: changing consumer preferences; the company's inability to successfully market its footwear, apparel, accessories and other merchandise; price, product and other competition from other retailers (including internet and direct manufacturer sales); the unavailability of products; the inability to locate and obtain favorable lease terms for the company's stores; the loss of key employees; the effect of economic conditions including current conditions in the financial services industry, depressed demand in the housing market and unemployment rates; management of growth, the outcome of litigation, and the other risks detailed in the company's Securities and Exchange Commission filings.
Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. The company undertakes no obligation to release publicly the results of any revisions to these forward looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
The Company expects to report Q3 results on Tuesday, December 22, 2009 after the market closes followed by a live conference call on Wednesday, December 23, 2009 at approximately 8:30 a.m. EDT.
About Finish Line
The Finish Line, Inc. is a premium athletic footwear store and one of the nation's largest mall-based specialty retailers, offering a large selection of performance and sport-style footwear, apparel and accessories for men, women and kids. The Finish Line, Inc. is publicly traded on the NASDAQ Global Select Market under the symbol FINL. The company operates 680 Finish Line stores in 47 states and offers online shopping at www.finishline.com.
The Finish Line, Inc.
Consolidated Statements of Operations (Unaudited)
(In thousands, except per share and store data)
Thirteen Thirteen Twenty-Six Twenty-Six
Weeks Ended Weeks Ended Weeks Ended Weeks Ended
August 29, August 30, August 29, August 30,
2009 2008 2009 2008
---- ---- ---- ----
Net sales $298,733 $337,000 $557,829 $610,019
Cost of sales
(including
occupancy costs) 203,364 229,740 386,086 422,675
------- ------- ------- -------
Gross profit 95,369 107,260 171,743 187,344
Selling, general
and administrative
expenses 75,260 82,762 148,414 158,667
Store closing costs 1,381 250 1,612 250
Terminated merger-
related costs - 45 - 83
--- --- --- ---
Operating income 18,728 24,203 21,717 28,344
Interest income, net 108 243 212 498
--- --- --- ---
Income from
continuing
operations
before income
taxes 18,836 24,446 21,929 28,842
Income tax expense 7,088 9,535 8,422 11,589
----- ----- ----- ------
Income from
continuing
operations 11,748 14,911 13,507 17,253
Loss from
discontinued
operations, net
of income taxes (12,622) (1,817) (14,989) (3,291)
------- ------ ------- ------
Net (loss) income $(874) $13,094 $(1,482) $13,962
===== ======= ======= =======
Income (loss) per
diluted share:
Income from
continuing
operations $0.21 $0.27 $0.24 $0.32
Loss from
discontinued
operations (0.23) (0.03) (0.27) (0.06)
----- ----- ----- -----
Net (loss) income $(0.02) $0.24 $(0.03) $0.26
====== ===== ====== =====
Diluted weighted
average shares
outstanding 54,560 54,334 54,484 54,007
====== ====== ====== ======
Dividends declared
per share $0.030 $0.030 $0.060 $0.030
====== ====== ====== ======
Number of stores
open at end of
period:
Finish Line 681 697
Man Alive (sold in July 2009) - 94
--- ---
Total 681 791
=== ===
Thirteen Weeks Ended Twenty-Six Weeks Ended
-------------------- ----------------------
August 29, August 30, August 29, August 30,
2009 2008 2009 2008
---- ---- ---- ----
Net sales 100.0 % 100.0 % 100.0 % 100.0 %
Cost of sales
(including occupancy
costs) 68.1 68.2 69.2 69.3
---- ---- ---- ----
Gross profit 31.9 31.8 30.8 30.7
Selling, general and
administrative expenses 25.2 24.6 26.6 26.0
Store closing costs 0.4 0.1 0.3 0.1
Terminated merger-related
costs - - - -
--- --- --- ---
Operating income 6.3 7.1 3.9 4.6
Interest income, net - 0.1 - 0.1
--- --- --- ---
Income from continuing
operations before
income taxes 6.3 7.2 3.9 4.7
Income tax expense 2.4 2.8 1.5 1.9
--- --- --- ---
Income from continuing
operations 3.9 4.4 2.4 2.8
Loss from discontinued
operations, net of
income taxes (4.2) (0.5) (2.7) (0.5)
---- ---- ---- ----
Net (loss) income (0.3) % 3.9 % (0.3) % 2.3 %
==== === ==== ===
Condensed Consolidated Balance Sheet
August 29, August 30, February 28,
2009 2008 2009
---- ---- ----
(Unaudited) (Unaudited)
ASSETS
------
Cash and cash equivalents $142,926 $65,035 $115,875
Merchandise inventories, net 221,365 269,881 239,409
Other current assets 27,800 47,494 31,791
Property and equipment, net 152,839 206,719 173,119
Other assets 32,231 43,681 38,539
------ ------ ------
Total assets $577,161 $632,810 $598,733
======== ======== ========
LIABILITIES AND SHAREHOLDERS'
EQUITY
-----------------------------
Current liabilities $96,731 $125,732 $107,838
Terminated merger-related
liabilities - 218 -
Deferred credits from landlords 43,661 56,354 51,939
Other long-term liabilities 15,109 14,957 14,562
Shareholders' equity 421,660 435,549 424,394
------- ------- -------
Total liabilities and
shareholders' equity $577,161 $632,810 $598,733
======== ======== ========
CONTACTS:
Investor Relations:
Edward W. Wilhelm, (317) 899-1022 ext. 6914
Executive Vice President - Chief Financial Officer
Media Requests:
Elise Hasbrook, (317) 899-1022 ext. 6827
Corporate Communications Manager
SOURCE The Finish Line, Inc.
