EX-99.1 2 fl_8k0103ex.htm PRESS RELEASE fl_8k0103ex.htm
Exhibit 99.1


 
FINISH LINE REPORTS THIRD QUARTER RESULTS



INDIANAPOLIS— January 3, 2008—The Finish Line, Inc. (the “Company”) (NASDAQ:FINL) announced results for the third quarter representing the thirteen weeks ended December 1, 2007 (the “third quarter” or “Q3”).


THIRD QUARTER RESULTS:

For the third quarter, the Company reported a loss from continuing operations of $13.8 million, or $.29 per diluted share versus a loss from continuing operations of $1.8 million, or $.04 per diluted share for the thirteen weeks ended November 25, 2006 (“Q3 LY”).  For Q3, the non-GAAP loss from continuing operations per diluted share was $.17.  The non-GAAP loss from continuing operations excludes $.12 per diluted share for expenses incurred in connection with the pending merger with Genesco Inc. and the related litigation.  A reconciliation of loss from continuing operations per diluted share on a GAAP basis to loss from continuing operations per diluted share excluding these expenses, a non-GAAP financial measure, is found in the table at the end of the release.  Diluted weighted average shares outstanding were 47.2 million for Q3 versus 46.9 million for Q3 LY.

Net sales decreased 4.0% to $268.7 million for Q3 compared to $280.0 million reported for Q3 LY.  Comparable store net sales decreased 3.6% for Q3 as compared to the 3.3% decrease reported for Q3 LY.  As noted in our December 6, 2007 sales release, due to the shift of one week in the retail calendar resulting from last year’s 53-week year, Q3 LY included approximately $6.7 million of additional sales due to an additional week of the “Back to School” selling season.

Merchandise inventories on a consolidated basis declined to $338.7 million at December 1, 2007 compared to $356.9 million at November 25, 2006. As of December 1, 2007, on a per square foot basis, consolidated inventories decreased 5%, and Finish Line store merchandise inventories decreased 3% compared to one year ago.

Mr. Alan H. Cohen, Chairman and CEO, stated, “We are implementing both operating and product initiatives to drive improvements in our business.  Our customers are responding well to the new brands that we’ve recently introduced.  Going forward, we see growth opportunities in both performance and sport style product and will continue to emphasize premium offerings as part of our efforts to differentiate Finish Line and create enthusiasm with our customers.”

YEAR-TO-DATE RESULTS:
 
For the thirty-nine weeks ended December 1, 2007 (“YTD”) the Company reported a loss from continuing operations of $9.5 million, or $.20 per diluted share versus income from continuing operations of $14.5 million, or $.30 per diluted share for the thirty-nine weeks ended November 25, 2006 (“YTD LY”).  For YTD, the non-GAAP loss from continuing operations per diluted share was $.07.  The non-GAAP loss from continuing operations results excludes $.13 per diluted share for expenses incurred in connection with the pending merger with Genesco Inc. and the related litigation.  Diluted weighted average shares outstanding were 47.2 million for YTD versus 47.9 million for YTD LY.

Net sales decreased 1.3% to $894.4 million for YTD compared to $906.2 million for YTD LY.  Comparable store net sales decreased 4.1% for YTD versus a 5.8% decrease reported for YTD LY.



CONFERENCE CALL:

The Company is hosting a live conference call at 8:30 am (ET) on Friday, January 4th.  Interested parties may participate in the call by calling 1-706-634-5566 (conference ID# is 25979417). Those interested in listening to the call on the web can do so at www.finishline.com under Investor Relations.

The Company will make available a replay of the live conference call by calling 1-706-645-9291 (Conference ID# 25979417). This replay will be available commencing at approximately 9:45 ET on Friday, January 4th and will remain available through January 7th.  In addition, the replay will be available on the web at www.finishline.com under Investor Relations.

The Company has experienced, and expects to continue to experience, significant variability in net sales 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 actual results to differ materially include, but are not limited to: costs, potential liabilities, and other events relating to the Company’s Merger Agreement with Genesco Inc. and the related litigation; 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, general economic conditions and adverse factors impacting the retail athletic industry; management of growth, and the other risks detailed in the Company’s Securities and Exchange Commission filings.  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 Finish Line, Inc. is one of the largest mall-based specialty retailers operating under the Finish Line and Man Alive brand names.  The Finish Line, Inc. is publicly traded on the NASDAQ Global Select Market under the symbol FINL. The Company currently operates 701 Finish Line stores in 47 states and online and 96 Man Alive stores in 19 states and online.  To learn more about these brands, visit www.finishline.com and www.manalive.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
  
   
December 1,
    
November 25,
    
December 1,
    
November 25,
  
   
2007
    
2006
    
2007
    
2006
  
                         
Net sales
   $
268,699
     $
280,025
     $
894,409
     $
906,242
  
Cost of sales (including occupancy expenses)
    
198,803
      
201,895
      
646,163
      
640,172
  
Gross profit
    
69,896
      
78,130
      
248,246
      
266,070
  
                                 
Selling, general, and administrative expenses
    
83,261
      
80,917
      
253,372
      
243,524
  
Merger related costs
    
9,658
      
-
      
9,883
      
-
  
Operating (loss) income
     (23,023 )     (2,787 )     (15,009 )    
22,546
  
                                 
Interest income (expense), net
    
223
       (21 )    
923
      
864
  
(Loss) income from continuing operations
                                
  before income taxes
     (22,800 )     (2,808 )     (14,086 )    
23,410
  
Income tax (benefit) expense
     (9,035 )     (1,047 )     (4,626 )    
8,951
  
(Loss) income from continuing operations
     (13,765 )     (1,761 )     (9,460 )    
14,459
  
Loss from discontinued operations,
                                
  net of income tax benefit
     (2,189 )     (1,219 )     (12,163 )     (3,162 )
Net (loss) income
   $ (15,954 )   $ (2,980 )   $ (21,623 )   $
11,297
  
                                 
Diluted (loss) income per share:
                                
  (Loss) income from continuing operations
   $ (0.29 )   $ (0.04 )   $ (0.20 )   $
0.30
  
  Loss from discontinued operations
     (0.05 )     (0.02 )     (0.26 )     (0.06 )
  Net (loss) income
   $ (0.34 )   $ (0.06 )   $ (0.46 )   $
0.24
  
                                 
Diluted weighted average shares outstanding
    
47,211
      
46,909
      
47,178
      
47,882
  
Dividends declared per share
   $
-
     $
0.025
     $
0.025
     $
0.075
  
                                 
Number of stores open at end of period:
                                
                    Finish Line
                    
701
      
692
  
                    Man Alive
                    
96
      
88
  
                    Paiva
                    
-
      
12
  
                         Total
                    
797
      
792
  
                                 
   
Condensed Consolidated Balance Sheet
  
           
December 1,
    
November 25,
    
March 3,
  
           
2007
    
2006
    
2007
  
           
(Unaudited)
    
(Unaudited)
          
ASSETS
                                
Cash and cash equivalents
           $
14,065
     $
12,899
     $
62,864
  
Merchandise inventories, net
            
338,732
      
356,856
      
287,300
  
Other current assets
            
29,432
      
23,750
      
30,212
  
Property and equipment, net
            
229,726
      
255,510
      
247,468
  
Other assets
            
36,795
      
27,913
      
28,792
  
Total assets
           $
648,750
     $
676,928
     $
656,636
  
                                 
LIABILITIES AND SHAREHOLDERS' EQUITY
                                
Short-term borrowings
           $
-
     $
20,400
     $
-
  
Other current liabilities
            
145,982
      
164,566
      
142,886
  
Deferred credits from landlords
            
62,686
      
64,379
      
64,472
  
Other long-term liabilities
            
8,370
      
-
      
-
  
Shareholders' equity
            
431,712
      
427,583
      
449,278
  
Total liabilities and shareholders' equity
           $
648,750
     $
676,928
     $
656,636
  
 
 
 
The Finish Line, Inc.
SEC REGULATION G
 
RECONCILIATION OF LOSS FROM CONTINUING OPERATIONS PER DILUTED SHARE ON A GAAP BASIS TO LOSS FROM CONTINUING OPERATIONS PER DILUTED SHARE ON A NON-GAAP BASIS
 
           
 
  
Thirteen Weeks Ended
December 1, 2007
  
Thirty-nine Weeks Ended
December 1, 2007
  
Loss from continuing operations per diluted share on a GAAP basis
   $
0.29
   $
0.20
  
Subtract: expenses related to Genesco matter
    
0.12
    
0.13
  
               
Loss from continuing operations per diluted share on a non-GAAP basis (a)
   $
0.17
   $
0.07
  
               
 
 
____
(a)
______
Loss from continuing operations per diluted share excluding the amount noted above is a non-GAAP financial measure. We believe this is an important metric as it represents our loss per diluted share from continuing operations without the impact of merger related charges.

CONTACTS:
Investor Relations Contact:
Kevin S. Wampler, (317) 899-1022 ext. 6914
Executive Vice President - Chief Financial Officer
 
Media Requests Contact:
Elise Hasbrook, (317) 899-1022 ext. 6827
Corporate Communications Manager