INDIANAPOLIS, Dec. 22 /PRNewswire-FirstCall/ -- The Finish Line, Inc. (Nasdaq: FINL) today reported results for its third fiscal quarter, representing the 13-week period ended November 28, 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.
Third Quarter Results
Net sales declined 0.2% to $240.1 million for the third quarter compared to $240.6 million a year ago. Comparable store net sales increased 1.7% in the third quarter compared to a 3.3% comparable store net sales decline the prior year.
Due to a favorable agreement entered into with the Internal Revenue Service (IRS) regarding the tax treatment of the terminated Genesco merger and related litigation, Finish Line recorded a one-time tax benefit of $6.5 million in the third quarter. With this tax benefit, the company reported third quarter income from continuing operations of $6.5 million, or $0.12 per diluted share, compared to a loss from continuing operations of $6.5 million, or ($0.12) per diluted share, in the third quarter last year. Without the tax benefit, third quarter non-GAAP income from continuing operations was $16,000, or $0.00 (flat) per diluted share compared to the ($0.12) per diluted share loss a year ago. A reconciliation of income from continuing operations per diluted share on a GAAP basis to income from continuing operations per diluted share excluding the tax benefit, a non-GAAP financial measure, is found in the table at the end of this news release. Diluted weighted average shares outstanding for the third quarter were 54.9 million versus 53.9 million for the same period a year ago.
Consolidated merchandise inventories decreased 19.0% to $237.5 million as of November 28, 2009 compared to $293.2 million a year ago. Finish Line inventory declined 14.4% overall and 11.0% on a per-square-foot basis.
At quarter end, the company had no interest-bearing debt and $149.2 million in cash and cash equivalents, up from $55.1 million at the end of the third quarter a year ago.
"We continue to display an ability to perform well and improve our business in what remains a cautious consumer environment," said Finish Line Chief Executive Officer Glenn Lyon. "In the third quarter, we effectively controlled expenses, managed inventories and improved store execution. We also continued to work productively with our vendor partners to stress innovation in product, consistent with our ongoing premium positioning. We are doing a good job of leveraging our strengths and continue to seek paths for profitable growth while we remain in a challenging consumer environment."
Year-to-Date Results
Net sales declined 6.2% to $797.9 million, compared to $850.6 million a year ago. Year-to-date comparable store net sales decreased 4.7% versus a 1.4% increase last year.
For the 39 weeks ended November 28, 2009, Finish Line reported income from continuing operations of $20.0 million, or $0.36 per diluted share with the one-time $6.5 million tax benefit, versus income from continuing operations of $10.8 million, or $0.20 per diluted share for the same period a year ago. Without the tax benefit, the year-to-date non-GAAP income from continuing operations was $13.5 million, or $0.24 per diluted share. This compares to the $0.20 per diluted share for the same period the prior year, which is a 20% increase year over year. A reconciliation of income from continuing operations per diluted share on a GAAP basis to income from continuing operations per diluted share excluding the tax benefit, a non-GAAP financial measure, is found in the table at the end of the release.
December Sales
Comparable store net sales on a month-to-date basis for the period of November 29( )through December 20( )increased 4.9% compared to a 22.1% decline for the same period one year ago.
Conference Call Tomorrow
The company will host a conference call for investors Wednesday, December 23( )at 8:30 a.m. Eastern. To participate in the conference call, dial (660) 422-4970, conference ID#45826667. To listen online, visit www.finishline.com. A replay of the conference call can be accessed approximately 30 minutes following the completion of the call at (706) 645-9291, conference ID#45826667. This recording will be available through Monday, December 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.
Q4 FY 2010 Release/Conference Call Date
The company expects to report fourth quarter results Thursday March 25, 2010 after market close followed by a conference call on Friday March 26, 2010 at approximately 8:30 a.m. Eastern.
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 everyday sport 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 681 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 Thirty-Nine Thirty-Nine
Weeks Ended Weeks Ended Weeks Ended Weeks Ended
November 28, November 29, November 28, November 29,
2009 2008 2009 2008
------------- ------------ ------------ ------------
Net sales $240,056 $240,571 $797,885 $850,590
Cost of sales
(including
occupancy costs) 169,144 175,609 555,230 598,284
------- ------- ------- -------Gross profit 70,912 64,962 242,655 252,306
Selling, general and
administrative expenses 70,351 75,566 218,765 234,233
Store closing costs 535 - 2,147 250
Terminated merger-
related costs - 23 - 106
--- --- --- ---
Operating income (loss) 26 (10,627) 21,743 17,717
Interest income, net 66 189 278 687
--- --- --- ---
Income (loss) from
continuing operations
before income taxes 92 (10,438) 22,021 18,404
Income tax (benefit)
expense (6,439) (3,935) 1,983 7,654
------ ------ ----- -----
Income (loss) from
continuing operations 6,531 (6,503) 20,038 10,750
Income (loss) from
discontinued operations,
net of income taxes 62 (2,340) (14,927) (5,631)
--- ------ ------- ------
Net income (loss) $6,593 $(8,843) $5,111 $5,119
====== ======= ====== ======
Income (loss) per
diluted share:
Income (loss) from
continuing operations $0.12 $(0.12) $0.36 $0.20
Loss from discontinued
operations 0.00 (0.04) (0.27) (0.10)
---- ----- ----- -----
Net income (loss) $0.12 $(0.16) $0.09 $0.10
===== ====== ===== =====
Diluted weighted average
shares outstanding 54,877 53,935 54,615 54,103
====== ====== ====== ======
Dividends declared
per share $0.03 $0.03 $0.09 $0.06
===== ===== ===== =====
Store activity for the
period (Finish Line
only):
Beginning of period 681 697 689 697
Opened 4 3 5 9
Closed (4) (1) (13) (7)
--- --- --- ---
End of period 681 699 681 699
=== === === ===
Square feet at end
of period 3,671,926 3,819,982
Thirteen Weeks Ended Thirty-Nine Weeks Ended
--------------------------- ---------------------------
November 28, November 29, November 28, November 29,
2009 2008 2009 2008
------------ ------------ ------------ ------------
Net sales 100.0 % 100.0 % 100.0 % 100.0 %
Cost of sales
(including
occupancy costs) 70.5 73.0 69.6 70.3
---- ---- ---- ----
Gross profit 29.5 27.0 30.4 29.7
Selling, general
and administrative
expenses 29.3 31.4 27.4 27.5
Store closing costs 0.2 - 0.3 0.1
Terminated merger-
related costs - - - -
--- --- --- ---
Operating income
(loss) - (4.4) 2.7 2.1
Interest
income, net - 0.1 - 0.1
--- --- --- ---
Income (loss) from
continuing
operations
before
income taxes - (4.3) 2.7 2.2
Income tax
(benefit) expense (2.7) 1.6 0.2 0.9
---- --- --- ---
Income (loss)
from continuing
operations 2.7 (2.7) 2.5 1.3
Loss from
discontinued
operations,
net of income
taxes - (1.0) (1.9) (0.7)
--- ---- ---- ----
Net income (loss) 2.7 % (3.7) % 0.6 % 0.6 %
=== ===== === ===
Condensed Consolidated Balance Sheet
November 28, November 29, February 28,
2009 2008 2009
------------ ------------ ------------
(Unaudited) (Unaudited)
ASSETS
Cash and cash equivalents $149,184 $55,148 $115,875
Merchandise inventories, net 237,459 293,244 239,409
Other current assets 36,312 39,656 31,791
Property and equipment, net 146,537 201,005 173,119
Other assets 24,990 44,592 38,539
------ ------ ------
Total assets $594,482 $633,645 $598,733
======== ======== ========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities $111,883 $137,227 $107,838
Terminated merger-related
liabilities - 206 -
Deferred credits from
landlords 42,407 54,441 51,939
Other long-term liabilities 11,505 15,042 14,562
Shareholders' equity 428,687 426,729 424,394
------- ------- -------
Total liabilities and
shareholders' equity $594,482 $633,645 $598,733
======== ======== ========
The Finish Line, Inc.
SEC REGULATION G
RECONCILIATION OF INCOME (LOSS) FROM CONTINUING OPERATIONS ON A GAAP BASIS
TO INCOME (LOSS) FROM CONTINUING OPERATIONS ON A NON-GAAP BASIS
(IN THOUSANDS)
Thirteen Thirteen Thirty-Nine Thirty-Nine
Weeks Ended Weeks Ended Weeks Ended Weeks Ended
November 28, November 29, November 28, November 29,
2009 2008 2009 2008
------------- ------------ ------------ ------------
Income (loss) from
continuing operations
on a GAAP basis $6,531 $(6,503) $20,038 $10,750
Subtract: One time tax
benefit associated
with terminated
merger (6,515) - (6,515) -
Income (loss) from
continuing operations
on a non-GAAP
basis (a) $16 $(6,503) $13,523 $10,750
=== ======= ======= =======
RECONCILIATION OF INCOME (LOSS) FROM CONTINUING OPERATIONS PER
DILUTED SHARE ON A GAAP BASIS TO INCOME (LOSS) FROM CONTINUING
OPERATIONS PER DILUTED SHARE ON A NON-GAAP BASIS
Thirteen Thirteen Thirty-Nine Thirty-Nine
Weeks Ended Weeks Ended Weeks Ended Weeks Ended
November 28, November 29, November 28, November 29,
2009 2008 2009 2008
------------- ------------ ------------ ------------
Income (loss) from
continuing operations
on a GAAP basis $0.12 $(0.12) $0.36 $0.20
Subtract: One time tax
benefit associated with
terminated merger (0.12) - (0.12) -
Income (loss) from
continuing operations per
diluted share on a
non-GAAP basis (a) $- $(0.12) $0.24 $0.20
=== ====== ===== =====
(a) Income (loss) from continuing operations per diluted share excluding
the amount noted above is a non-GAAP financial measure.
The Company believes this is an important metric as it represents our
income (loss) from continuing operations per diluted share without
the one time impact of the tax benefit associated with the
terminated merger.
CONTACTS:
Investor Relations Contact:
---------------------------
Edward W. Wilhelm (317) 899-1022 ext.
6914
Executive Vice President -Chief
Financial Officer
Media Requests Contact:
-----------------------
Anne Roman (419) 724-9900
On behalf of The Finish Line, Inc.
SOURCE The Finish Line, Inc.
