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Finish Line Reports Second Quarter Fiscal Year 2014 Results

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 Twenty-Six Weeks Ended
August 31, September 1, August 31, September 1,
2013 2012 2013 2012
 
Net sales $ 436,030 $ 385,011 $ 787,083 $ 704,060
Cost of sales (including occupancy costs)   289,693   250,461   533,751   464,851
Gross profit 146,337 134,550 253,332 239,209
 
Selling, general and administrative expenses 103,455 94,711 202,811 179,557
Store closing costs   17   325   203   420
Operating income 42,865 39,514 50,318 59,232
 
Interest income, net   10   58   24   129
Income before income taxes 42,875 39,572 50,342 59,361
 
Income tax expense   16,682   15,136   19,635   22,844
Net income 26,193 24,436 30,707 36,517
Net loss attributable to redeemable noncontrolling interest   314   537   875   734
Net income attributable to The Finish Line, Inc. $ 26,507 $ 24,973 $ 31,582 $ 37,251
 
Diluted earnings per share attributable to The Finish Line, Inc. shareholders $ 0.54 $ 0.49 $ 0.64 $ 0.72
 
Diluted weighted average shares   48,757   50,866   48,744   51,135
 
Dividends declared per share $ 0.07 $ 0.06 $ 0.14 $ 0.12
 
Finish Line store activity for the period:
Beginning of period 651 640 645 637
Opened 9 4 19 13
Closed   (1)   (6)   (5)   (12)
End of period   659   638   659   638
Square feet at end of period 3,571,267 3,449,041
Average square feet per store 5,419 5,406
 
Branded shops within department stores activity for the period:
Beginning of period 44 - 3 -
Opened 89 - 130 -
Closed   -   -   -   -
End of period   133   -   133   -
Square feet at end of period - 158,948 -
Average square feet per shop - 1,195 -
 
Running Company store activity for the period:
Beginning of period 38 19 27 19
Acquired - - 9 -
Opened 1 - 3 -
Closed   -   -   -   -
End of period   39   19   39   19
Square feet at end of period 119,964 60,436
Average square feet per store 3,076 3,181
 
 
 
Thirteen Weeks Ended Twenty-Six Weeks Ended
August 31, September 1, August 31, September 1,
2013 2012 2013 2012
Net sales 100.0 % 100.0 % 100.0 % 100.0 %
Cost of sales (including occupancy costs)   66.4   65.0   67.8   66.0
Gross profit 33.6 35.0 32.2 34.0
 
Selling, general and administrative expenses 23.8 24.6 25.8 25.5
Store closing costs   -   0.1   -   0.1
Operating income 9.8 10.3 6.4 8.4
 
Interest income, net   -   -   -   -
Income before income taxes 9.8 10.3 6.4 8.4
 
Income tax expense   3.8   3.9   2.5   3.2
 
Net income 6.0 6.4 3.9 5.2
Net loss attributable to redeemable noncontrolling interest   -   0.1   0.1   0.1
Net income attributable to The Finish Line, Inc.   6.0 %   6.5 %   4.0 %   5.3 %
 
                   
 
Condensed Consolidated Balance Sheets
 
August 31, September 1, March 2,
2013 2012 2013
(Unaudited) (Unaudited)
ASSETS
Cash and cash equivalents $ 203,832 $ 254,225 $ 226,982
Merchandise inventories, net 295,952 250,634 243,770
Other current assets 23,852 25,742 20,942
Property and equipment, net 202,450 157,539 180,601
Goodwill 21,544 8,503 13,888
Other assets   19,932   24,770   20,239
Total assets $ 767,562 $ 721,413 $ 706,422
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 172,122 $ 138,814 $ 134,037
Deferred credits from landlords 28,544 26,748 27,215
Other long-term liabilities 17,131 15,970 16,638
Redeemable noncontrolling interest 2,772 5,248 3,669
Shareholders' equity   546,993   534,633   524,863
Total liabilities and shareholders' equity $ 767,562 $ 721,413 $ 706,422
 
       
 
The Finish Line, Inc.
Reconciliation of Gross Profit, GAAP to Gross Profit, Non-GAAP (unaudited)
(In thousands)
               
Thirteen Weeks Ended Twenty-Six Weeks Ended
August 31, 2013 September 1, 2012 August 31, 2013 September 1, 2012
 
Gross profit, GAAP $ 146,337 33.6 % $ 134,550 35.0 % $ 253,332 32.2 % $ 239,209 34.0 %
Start up costs   - -   - -   5,758 0.7   - -
Gross profit, Non-GAAP $ 146,337 33.6 % $ 134,550 35.0 % $ 259,090 32.9 % $ 239,209 34.0 %
 
 
 
Reconciliation of Selling, General and Administrative Expenses, GAAP to
Selling, General and Administrative Expenses, Non-GAAP (unaudited)
(In thousands)
 
Thirteen Weeks Ended Twenty-Six Weeks Ended
August 31, 2013 September 1, 2012 August 31, 2013 September 1, 2012
 
Selling, general and administrative expenses, GAAP $ 103,455 23.8 % $ 94,711 24.6 % $ 202,811 25.8 % $ 179,557 25.5 %
Start up costs   - -   - -   (2,202)

(0.3)

 

  - -
Selling, general and administrative expenses, Non-GAAP $ 103,455 23.8 % $ 94,711 24.6 % $ 200,609 25.5 % $ 179,557 25.5 %
 
 
 
Reconciliation of Operating Income, GAAP to Operating Income, Non-GAAP (unaudited)
(In thousands)
 
Thirteen Weeks Ended Twenty-Six Weeks Ended
August 31, 2013 September 1, 2012 August 31, 2013 September 1, 2012
 
Operating income, GAAP $ 42,865 9.8 % $ 39,514 10.3 % $ 50,318 6.4 % $ 59,232 8.4 %
Start up costs   - -   - -   7,960 1.0   - -
Operating income, Non-GAAP $ 42,865 9.8 % $ 39,514 10.3 % $ 58,278 7.4 % $ 59,232 8.4 %
 
 
 
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 Twenty-Six Weeks Ended
August 31, 2013 September 1, 2012 August 31, 2013 September 1, 2012
 
Net income attributable to The Finish Line, Inc., GAAP $ 26,507 6.0 % $ 24,973 6.5 % $ 31,582 4.0 % $ 37,251 5.3 %
Start up costs - - - - 7,960 1.0 - -
Tax effect of start up costs   - -   - -   (3,109)

(0.4)

 

  - -
Net income attributable to The Finish Line, Inc., Non-GAAP $ 26,507 6.0 % $ 24,973 6.5 % $ 36,433 4.6 % $ 37,251 5.3 %
 
 
 
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 Twenty-Six Weeks Ended
August 31, 2013 September 1, 2012 August 31, 2013 September 1, 2012
 
Diluted earnings per share attributable to The Finish Line, Inc. shareholders, GAAP $ 0.54 $ 0.49 $ 0.64 $ 0.72
Start up costs, net of income taxes   - -   0.10 -
Diluted earnings per share attributable to The Finish Line, Inc. shareholders, Non-GAAP $ 0.54 $ 0.49 $ 0.74 $ 0.72
 
 
* See Non-GAAP Financial Measures Disclosure Above
 




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