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Finish Line Reports First Quarter Fiscal Year 2014 Results

Stocks in this article: FINL

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 (Unaudited)

 

(In thousands, except per share and store/shop data)

 
Thirteen Weeks Ended
June 1, June 2,
2013 2012
 
 
Net sales $ 351,054 $ 319,049
Cost of sales (including occupancy costs)   244,059     214,390  
Gross profit 106,995 104,659
 
Selling, general and administrative expenses 99,356 84,846
Store closing costs   186     95  
Operating income 7,453 19,718
 
Interest income, net   15     71  
Income before income taxes 7,468 19,789
 
Income tax expense   2,953     7,708  
Net income 4,515 12,081
Net loss attributable to redeemable noncontrolling interest   561     197  
Net income attributable to The Finish Line, Inc. $ 5,076   $ 12,278  
 
Diluted earnings per share attributable to The Finish Line, Inc. shareholders $ 0.10   $ 0.24  
 
Diluted weighted average shares   48,732     51,403  
 
Dividends declared per share $ 0.07   $ 0.06  
 
Finish Line store activity for the period:
Beginning of period 645 637
Opened 10 9
Closed   (4 )   (6 )
End of period   651     640  
Square feet at end of period 3,531,314 3,457,170
Average square feet per store 5,424 5,402
 
Branded shops within department stores activity for the period:
Beginning of period 3 -
Opened 41 -
Closed   -     -  
End of period   44     -  
Square feet at end of period 41,995 -
Average square feet per shop 954 -
 
Running Company store activity for the period:
Beginning of period 27 19

Acquired

9 -
Opened 2 -
Closed   -     -  
End of period   38     19  
Square feet at end of period 117,614 57,302
Average square feet per store 3,095 3,016
 
 
 
Thirteen Weeks Ended
June 1, June 2,
2013 2012
Net sales 100.0 % 100.0 %
Cost of sales (including occupancy costs)   69.5     67.2  
Gross profit 30.5 32.8
 
Selling, general and administrative expenses 28.3 26.6
Store closing costs   0.1     -  
Operating income 2.1 6.2
 
Interest income, net   -     -  
Income before income taxes 2.1 6.2
 
Income tax expense   0.8     2.4  
 
Net income 1.3 3.8
Net loss attributable to redeemable noncontrolling interest   0.1     0.1  
Net income attributable to The Finish Line, Inc.   1.4   %   3.9   %
 
 
 
Condensed Consolidated Balance Sheets
 
June 1, June 2, March 2,
2013 2012 2013
(Unaudited) (Unaudited)
ASSETS
Cash and cash equivalents $ 195,906 $ 261,958 $

226,982

 

Merchandise inventories, net 292,551 236,545 243,770
Other current assets 19,574 24,130 20,942
Property and equipment, net 183,593 137,749 180,601
Goodwill 21,544 8,503 13,888
Other assets   22,070     23,165     20,239  
Total assets $ 735,238   $ 692,050   $ 706,422  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 162,662 $ 132,402 $ 134,037
Deferred credits from landlords 27,618 27,906 27,215
Other long-term liabilities 17,441 15,827 16,638
Redeemable noncontrolling interest 3,097 5,795 3,669
Shareholders' equity   524,420     510,120     524,863  
Total liabilities and shareholders' equity $ 735,238   $ 692,050   $ 706,422  
       
 
The Finish Line, Inc.
Reconciliation of Gross Profit, GAAP to Gross Profit, Non-GAAP (unaudited)
(In thousands)
 
Thirteen Weeks Ended
June 1, 2013 June 2, 2012
 
 
Gross profit, GAAP $ 106,995 30.5 % $ 104,659 32.8 %
Start up costs   5,758   1.6     - -  
Gross profit, Non-GAAP $ 112,753   32.1 % $ 104,659 32.8 %
 
 
 
Reconciliation of Selling, General and Administrative Expenses, GAAP to
Selling, General and Administrative Expenses, Non-GAAP (unaudited)
(In thousands)
 
Thirteen Weeks Ended
June 1, 2013 June 2, 2012
 
 
Selling, general and administrative expenses, GAAP $ 99,356 28.3 % $ 84,846 26.6 %
Start up costs   (2,202 ) (0.6 )   - -  
Selling, general and administrative expenses, Non-GAAP $ 97,154   27.7 % $ 84,846 26.6 %
 
 
 
 
Reconciliation of Operating Income, GAAP to Operating Income, Non-GAAP (unaudited)
(In thousands)
 
Thirteen Weeks Ended
June 1, 2013 June 2, 2012
 
 
Operating income, GAAP $ 7,453 2.1 % $ 19,718 6.2 %
Start up costs   7,960   2.3     - -  
Operating income, Non-GAAP $ 15,413   4.4 % $ 19,718 6.2 %
 
 
 
 
Reconciliation of Net Income Attributable to The Finish Line, Inc., GAAP to
Net Income Attributable to The Finish Line, Inc., Non-GAAP (unaudited)
(In thousands)
 
 

Thirteen Weeks Ended

June 1, 2013 June 2, 2012
 
 
Net income attributable to The Finish Line, Inc., GAAP $ 5,076 1.4 % $ 12,278 3.9 %
Start up costs 7,960 2.3 - -
Tax effect of start up costs   (3,109 ) (0.9 )   - -  
Net income attributable to The Finish Line, Inc., Non-GAAP $ 9,927   2.8 % $ 12,278 3.9 %
 
 
 
 
Reconciliation of Diluted Earnings Per Share Attributable to The Finish Line, Inc. Shareholders, GAAP to
Diluted Earnings Per Share Attributable to The Finish Line, Inc. Shareholders, Non-GAAP (unaudited)
 
Thirteen Weeks Ended
 
June 1, 2013 June 2, 2012
 
Diluted earnings per share attributable to The Finish Line, Inc. shareholders, GAAP $ 0.10 $ 0.24
Start up costs, net of income taxes   0.10   -  
Diluted earnings per share attributable to The Finish Line, Inc. shareholders, Non-GAAP $ 0.20   $ 0.24  
 

Note: See Non-GAAP Financial Measures Disclosure Above

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