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Finish Line Reports Fourth Quarter And Full Fiscal Year 2013 Results

About Finish Line

The Finish Line, Inc. is a premium retailer of athletic shoes, apparel and accessories. Headquartered in Indianapolis, Finish Line has 655 stores in malls across the U.S., which includes Finish Line-branded shops in five Macy’s department stores, and employs more than 11,000 sneakerologists who help customers every day connect with their sport, their life and their style. Online shopping is available at www.finishline.com and mobile shopping is available at m.finishline.com. Follow Finish Line on Twitter at Twitter.com/FinishLine and “like” Finish Line on Facebook at Facebook.com/FinishLine.

Finish Line also operates, through a venture with Gart Capital Partners, the Running Specialty Group, including 27 specialty running shops in eight states and the District of Columbia under The Running Company, Run On! and Road Runner banners. More information is available at www.run.com.

Forward-Looking Statements

This news release includes statements that are or may be considered “forward-looking” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally can be identified by the use of words or phrases such as, but not limited to, “believe,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” “build,” “may,” “should,” “will,” “estimates,” “indication,” “potential,” “optimistic,” “confidence,” “momentum,” “continue,” “lead to,” “evolve,” “expand,” “growth” or words and phrases of similar meaning. Statements that describe objectives, plans or goals also are forward-looking statements.

All of these forward-looking statements are subject to risks, management assumptions and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statements. The principal risk factors that could cause actual performance and future actions to differ materially from the forward-looking statements include, but are not limited to, the company’s reliance on a few key vendors for a majority of its merchandise purchases (including a significant portion from one key vendor); the availability and timely receipt of products; the ability to timely fulfill and ship products to customers; fluctuations in oil prices causing changes in gasoline and energy prices, resulting in changes in consumer spending as well as increases in utility, freight and product costs; product demand and market acceptance risks; deterioration of macro-economic and business conditions; the inability to locate and obtain or retain acceptable lease terms for the company’s stores; the effect of competitive products and pricing; loss of key employees; execution of strategic growth initiatives (including actual and potential mergers and acquisitions and other components of the company’s capital allocation strategy); and the other risks detailed in the company’s Securities and Exchange Commission filings. Readers are urged to consider these factors carefully in evaluating the forward-looking statements. The forward-looking statements included herein are made only as of the date of this report and Finish Line undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.
     
The Finish Line, Inc.
Consolidated Statements of Income
(In thousands, except per share and store data)
   
 
 
Thirteen Fourteen Fifty-Two Fifty-Three
Weeks Ended Weeks Ended Weeks Ended Weeks Ended
March 2, March 3, March 2, March 3,
2013 2012 2013 2012
(Unaudited) (Unaudited) (Unaudited)
 
Net sales $ 442,682 $ 456,260 $ 1,443,365 $ 1,369,259
Cost of sales (including occupancy costs)   287,237     286,737     958,921     889,130  
Gross profit 155,445 169,523 484,444 480,129
 
Selling, general and administrative expenses 94,906 101,811 365,883 343,629
Store closing costs 250 226 671 1,191
Impairment charges   5,566     974     5,593     974  
Operating income 54,723 66,512 112,297 134,335
 
Interest income, net   31     57     198     447  
Income before income taxes 54,754 66,569 112,495 134,782
 
Income tax expense   21,281     24,649     43,314     49,978  
Net income 33,473 41,920 69,181 84,804
Net loss attributable to redeemable noncontrolling interest   856     -     2,292     -  
Net income attributable to The Finish Line, Inc. $ 34,329   $ 41,920   $ 71,473   $ 84,804  
 
Diluted earnings per share attributable to The Finish Line, Inc. shareholders $ 0.69   $ 0.80   $ 1.40   $ 1.59  
 
Diluted weighted average shares   49,034     52,041     50,491     52,818  
 
Dividends declared per share $ 0.07   $ 0.06   $ 0.25   $ 0.21  
 
Finish Line store activity for the period:
Beginning of period 651 648 637 664
Opened 2 - 29 4
Closed   (8 )   (11 )   (21 )   (31 )
End of period   645     637     645     637  
Square feet at end of period 3,511,128 3,440,788
Average square feet per store 5,444 5,402
 
Running Company store activity for the period:
Beginning of period 25 19 19 -
Acquired 1 - 6 18
Opened 1 - 2 1
Closed   -     -     -     -  
End of period   27     19     27     19  
Square feet at end of period 80,195 57,302
Average square feet per store 2,970 3,016
 
 
 
Thirteen Fourteen Fifty-Two Fifty-Three
Weeks Ended Weeks Ended Weeks Ended Weeks Ended
March 2, March 3, March 2, March 3,

 
2013 2012 2013 2012

Net sales
100.0 % 100.0 % 100.0 % 100.0 %

Cost of sales (including occupancy costs)
  64.9     62.8     66.4     64.9  

Gross profit
35.1 37.2 33.6 35.1
 
Selling, general and administrative expenses 21.4 22.3 25.3 25.1
Store closing costs 0.1 0.1 0.1 0.1
Impairment charges   1.2     0.2     0.4     0.1  
Operating income 12.4 14.6 7.8 9.8
 
Interest income, net   -     -     -     -  
Income before income taxes 12.4 14.6 7.8 9.8
 
Income tax expense   4.8     5.4     3.0     3.6  
 
Net income 7.6 9.2 4.8 6.2
Net loss attributable to redeemable noncontrolling interest   0.1     -     0.2     -  
Net income attributable to The Finish Line, Inc.   7.7   %   9.2   %   5.0   %   6.2   %
 
       

 

 

Condensed Consolidated Balance Sheet
 
March 2, March 3,
2013 2012
(Unaudited)
ASSETS
Cash and cash equivalents $ 226,982 $ 307,494
Merchandise inventories, net 243,770 220,405
Other current assets 20,942 24,849
Property and equipment, net 180,601 126,997
Other assets   34,127   31,751
Total assets $ 706,422 $ 711,496
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 134,037 $ 138,683
Deferred credits from landlords 27,215 27,737
Other long-term liabilities 16,638 15,539
Redeemable noncontrolling interest 3,669 -
Shareholders' equity   524,863   529,537
Total liabilities and shareholders' equity $ 706,422 $ 711,496
 
       
The Finish Line, Inc.
Reconciliation of Operating Income, GAAP to Operating Income, Non-GAAP
(In thousands)
 
Thirteen Weeks Ended Fourteen Weeks Ended Fifty-Two Weeks Ended Fifty-Three Weeks Ended
March 2, 2013 March 3, 2012 March 2, 2013 March 3, 2012

(Unaudited)

(Unaudited)

(Unaudited)
Operating income, GAAP $ 54,723 $ 66,512 $ 112,297 $ 134,335
Impairment charges   5,566     974     5,593     974  
Operating income, Non-GAAP $ 60,289   $ 67,486   $ 117,890   $ 135,309  
 
 
 
Reconciliation of Net Income Attributable to The Finish Line, Inc., GAAP to
Net Income Attributable to The Finish Line, Inc., Non-GAAP
(In thousands)
 
Thirteen Weeks Ended Fourteen Weeks Ended Fifty-Two Weeks Ended Fifty-Three Weeks Ended
March 2, 2013 March 3, 2012 March 2, 2013 March 3, 2012

(Unaudited)

(Unaudited)

(Unaudited)
Net income attributable to The Finish Line, Inc., GAAP $ 34,329 $ 41,920 $ 71,473 $ 84,804
Impairment charges 5,566 974 5,593 974
Tax effect on impairment charge   (2,176 )   (371 )   (2,187 )   (371 )
Net income attributable to The Finish Line, Inc., Non-GAAP $ 37,719   $ 42,523   $ 74,879   $ 85,407  
 
 
 
Reconciliation of Diluted EPS, GAAP to Diluted EPS, Non-GAAP
 
 
Thirteen Weeks Ended Fourteen Weeks Ended Fifty-Two Weeks Ended Fifty-Three Weeks Ended
March 2, 2013 March 3, 2012 March 2, 2013 March 3, 2012

(Unaudited)

(Unaudited)

(Unaudited)
Diluted earnings per share attributable to The Finish Line, Inc. shareholders, GAAP $ 0.69 $ 0.80 $ 1.40 $ 1.59
Impairment charges   0.07     0.01     0.07     0.01  

Diluted earnings per share attributable to The Finish Line, Inc. shareholders, Non-GAAP
$ 0.76   $ 0.81   $ 1.47   $ 1.60  
 
* See Non-GAAP Financial Measures Disclosure Above

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