Company Website:
http://www.finishline.com
INDIANAPOLIS -- (Business Wire)
The Finish Line, Inc. (NASDAQ: FINL) today reported results for the
thirteen weeks ended November 29, 2014.
For the thirteen weeks ended November 29, 2014:
-
Consolidated net sales were $395.8 million, an increase of 8.6% over
the prior year period.
-
Finish Line comparable store sales increased 4.5%.
-
On a GAAP basis, diluted earnings per share were $0.05.
-
Non-GAAP diluted earnings per share, which excludes the impact of
impairment charges and store closing costs, employee resignation costs
and the recognition of a one-time tax benefit were ($0.02).
“Third quarter comparable sales rebounded from second quarter trends,
however merchandise margin pressure kept us from achieving our
profitability plan,” said Glenn Lyon, Chairman and Chief Executive
Officer of Finish Line. “We remain confident in the strategic course we
have set for the company and we’ll continue to invest in the omnichannel
initiatives focused on delivering the long-term financial goals we have
previously outlined. That said, we are adjusting our near-term capital
spending plans and creating a more flexible expense structure to protect
profitability until stronger full price selling trends reemerge.”
Balance Sheet
As of November 29, 2014,
consolidated merchandise inventories increased 10.6% to $398.6 million
compared to $360.5 million as of November 30, 2013.
The company repurchased 1.2 million shares of common stock during the
thirteen weeks ended November 29, 2014, totaling $29.9 million. The
company has 1.9 million shares remaining on its current Board authorized
repurchase plan.
As of November 29, 2014, the company had no interest-bearing debt and
$85.4 million in cash and cash equivalents, compared to $111.9 million
as of November 30, 2013.
Outlook
For the fiscal year ending
February 28, 2015, Finish Line now expects non-GAAP diluted earnings per
share to be flat to fiscal year 2014 non-GAAP diluted earnings per share
of $1.67. The company expects Finish Line comparable store sales to
increase low to mid-single digits.
Q3 Fiscal 2015 Conference Call Today, December 19,
2014 at 8:30 a.m.
The company will host a conference call
for investors today, December 19, 2014, at 8:30 a.m. Eastern. To
participate in the live conference call, dial 866-923-8645 (U.S. and
Canada) or 660-422-4970 (International), conference ID #45036075. The
live conference call will also be accessible online at www.finishline.com.
A replay of the conference call can be accessed approximately two hours
following the completion of the call by dialing 855-859-2056, conference
ID #45036075. This recording will be made available through Monday,
January 19, 2015. The replay will also be accessible online at www.finishline.com.
Disclosure Regarding Non-GAAP Measures
This
report refers to certain financial measures that are identified as
non-GAAP. The company believes that these non-GAAP measures, including
gross profit, selling, general and administrative expenses, operating
income, income tax expense, net income attributable to The Finish Line,
Inc., and diluted earnings per share attributable to The Finish Line,
Inc. shareholders, are helpful to investors because they allow for a
more direct comparison of the company’s year-over-year performance and
are useful in assessing the company’s progress in achieving its
long-term financial objectives. This supplemental information should not
be considered in isolation or as a substitute for the related GAAP
measures. A reconciliation of the non-GAAP measures to the comparable
GAAP measures can be found in the company’s Form 8-K filed with the
Securities and Exchange Commission with this release.
About The Finish Line, Inc.
The
Finish Line, Inc. is a premium retailer of athletic shoes, apparel and
accessories. Headquartered in Indianapolis, Finish Line has
approximately 1,040 Finish Line branded locations primarily in U.S.
malls and shops inside Macy’s department stores and employs more than
14,000 sneakerologists who help customers every day connect with their
sport, their life and their style. Online shopping is available at www.finishline.com
and www.macys.com.
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.
Track loyalty points and find store and product information with the
free Finish Line app downloadable for iOS
and Android
customers.
Finish Line also operates the Running Specialty Group. This includes 66
specialty running stores in 15 states and the District of Columbia under
The Running Company, Run On!, Blue Mile, Boulder Running Company,
Roncker’s Running Spot, Running Fit, VA Runner, Capital RunWalk,
Richmond RoadRunner, Garry Gribble’s Running Sports and Run Colorado
banners. More information is available at www.run.com
or www.boulderrunningcompany.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 "believe," "expect," "future," "anticipate,"
"intend," "plan," "foresee," "may," "should," "will," "estimates,"
"outlook," "potential," "optimistic," "confidence," "continue,"
"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); cybersecurity risks, including
breach of customer data; 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
|
|
Thirty-Nine Weeks Ended
|
| | |
November 29,
|
|
November 30,
| |
November 29,
|
|
November 30,
|
| | |
2014
| |
2013
| |
2014
| |
2013
|
| | | | | | | | | | | | |
|
Net sales
| | |
$
|
395,828
| | |
$
|
364,455
| | |
$
|
1,269,239
| | |
$
|
1,151,538
| |
Cost of sales (including occupancy costs)
| | |
284,074
|
| |
256,607
|
| |
873,485
|
| |
790,358
|
|
Gross profit
| | |
111,754
| | |
107,848
| | |
395,754
| | |
361,180
| |
Selling, general and administrative expenses
| | |
114,923
| | |
104,092
| | |
335,701
| | |
306,903
| |
Impairment charges and store closing costs
| | |
462
|
| |
1,007
|
| |
3,155
|
| |
1,210
|
|
Operating (loss) income
| | |
(3,631
|
)
| |
2,749
| | |
56,898
| | |
53,067
| |
Interest income, net
| | |
—
|
| |
3
|
| |
6
|
| |
27
|
|
(Loss) income before income taxes
| | |
(3,631
|
)
| |
2,752
| | |
56,904
| | |
53,094
| |
Income tax (benefit) expense
| | |
(6,126
|
)
| |
1,161
|
| |
17,595
|
| |
20,796
|
|
Net income
| | |
2,495
| | |
1,591
| | |
39,309
| | |
32,298
| |
Net loss attributable to redeemable noncontrolling interest
| | |
83
|
| |
727
|
| |
1,861
|
| |
1,602
|
|
Net income attributable to The Finish Line, Inc.
| | |
$
|
2,578
|
| |
$
|
2,318
|
| |
$
|
41,170
|
| |
$
|
33,900
|
|
Diluted earnings per share attributable to The Finish Line, Inc.
shareholders
| | |
$
|
0.05
|
| |
$
|
0.05
|
| |
$
|
0.85
|
| |
$
|
0.69
|
|
Diluted weighted average shares
| | |
47,478
|
| |
48,709
|
| |
48,013
|
| |
48,733
|
|
Dividends declared per share
| | |
$
|
0.08
|
| |
$
|
0.07
|
| |
$
|
0.24
|
| |
$
|
0.21
|
|
| | | | | | | | | | | | |
|
Finish Line store activity for the period:
| | | | | | | | | | | | | |
Beginning of period
| | |
647
| | |
659
| | |
645
| | |
645
| |
Opened
| | |
2
| | |
3
| | |
9
| | |
22
| |
Closed
| | |
(7
|
)
| |
(4
|
)
| |
(12
|
)
| |
(9
|
)
|
End of period
| | |
642
|
| |
658
|
| |
642
|
| |
658
|
|
Square feet at end of period
| | | | | | | | |
3,492,050
| | |
3,566,404
| |
Average square feet per store
| | | | | | | | |
5,439
| | |
5,420
| |
Branded shops within department stores activity for the period:
| | | | | | | | | | | | | |
Beginning of period
| | |
370
| | |
133
| | |
185
| | |
3
| |
Opened
| | |
27
| | |
48
| | |
213
| | |
178
| |
Closed
| | |
—
|
| |
—
|
| |
(1
|
)
| |
—
|
|
End of period
| | |
397
|
| |
181
|
| |
397
|
| |
181
|
|
Square feet at end of period
| | | | | | | | |
406,063
| | |
224,515
| |
Average square feet per shop
| | | | | | | | |
1,023
| | |
1,240
| |
Running Specialty store activity for the period:
| | | | | | | | | | | | | |
Beginning of period
| | |
58
| | |
39
| | |
48
| | |
27
| |
Acquired
| | |
7
| | |
4
| | |
15
| | |
13
| |
Opened
| | |
1
| | |
4
| | |
3
| | |
7
| |
Closed
| | |
—
|
| |
—
|
| |
—
|
| |
—
|
|
End of period
| | |
66
|
| |
47
|
| |
66
|
| |
47
|
|
Square feet at end of period
| | | | | | | | |
234,162
| | |
154,348
| |
Average square feet per store
| | | | | | | | |
3,548
| | |
3,284
| |
| | | | | | | | | | | | |
|
|
|
| |
| |
| | |
Thirteen Weeks Ended
| |
Thirty-Nine Weeks Ended
|
| | |
November 29,
|
|
November 30,
| |
November 29,
|
|
November 30,
|
| | |
2014
| |
2013
| |
2014
| |
2013
|
Net sales
| | |
100.0
|
%
| |
100.0
|
%
| |
100.0
|
%
| |
100.0
|
%
|
Cost of sales (including occupancy costs)
| | |
71.8
|
| |
70.4
|
| |
68.8
|
| |
68.6
|
|
Gross profit
| | |
28.2
| | |
29.6
| | |
31.2
| | |
31.4
| |
Selling, general and administrative expenses
| | |
29.0
| | |
28.6
| | |
26.5
| | |
26.7
| |
Impairment charges and store closing costs
| | |
0.1
|
| |
0.2
|
| |
0.2
|
| |
0.1
|
|
Operating (loss) income
| | |
(0.9
|
)
| |
0.8
| | |
4.5
| | |
4.6
| |
Interest income, net
| | |
—
|
| |
—
|
| |
—
|
| |
—
|
|
(Loss) income before income taxes
| | |
(0.9
|
)
| |
0.8
| | |
4.5
| | |
4.6
| |
Income tax (benefit) expense
| | |
(1.5
|
)
| |
0.4
|
| |
1.4
|
| |
1.8
|
|
Net income
| | |
0.6
| | |
0.4
| | |
3.1
| | |
2.8
| |
Net loss attributable to redeemable noncontrolling interest
| | |
0.1
|
| |
0.2
|
| |
0.1
|
| |
0.1
|
|
Net income attributable to The Finish Line, Inc.
| | |
0.7
|
%
| |
0.6
|
%
| |
3.2
|
%
| |
2.9
|
%
|
| | | | | | | | | | | | |
|
|
|
| |
| | |
Condensed Consolidated Balance Sheets
|
| | |
November 29,
|
|
November 30,
|
|
March 1,
|
| | |
2014
| |
2013
| |
2014
|
| | |
(Unaudited)
| |
(Unaudited)
| | |
ASSETS | | | | | | | | | |
Cash and cash equivalents
| | |
$
|
85,426
| | |
$
|
111,916
| | |
$
|
229,079
|
Merchandise inventories, net
| | |
398,615
| | |
360,463
| | |
304,209
|
Other current assets
| | |
44,384
| | |
49,783
| | |
33,675
|
Property and equipment, net
| | |
256,262
| | |
213,188
| | |
223,182
|
Goodwill
| | |
32,902
| | |
24,035
| | |
25,608
|
Other assets, net
| | |
9,017
|
| |
14,185
|
| |
9,192
|
Total assets
| | |
$
|
826,606
|
| |
$
|
773,570
|
| |
$
|
824,945
|
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | | |
Current liabilities
| | |
$
|
209,049
| | |
$
|
180,756
| | |
$
|
193,670
|
Deferred credits from landlords
| | |
29,507
| | |
28,639
| | |
27,658
|
Other long-term liabilities
| | |
20,625
| | |
17,465
| | |
19,659
|
Redeemable noncontrolling interest, net
| | |
480
| | |
2,034
| | |
1,774
|
Shareholders’ equity
| | |
566,945
|
| |
544,676
|
| |
582,184
|
Total liabilities and shareholders’ equity
| | |
$
|
826,606
|
| |
$
|
773,570
|
| |
$
|
824,945
|
| | | | | | | | | | | |
|
|
The Finish Line, Inc.
|
Reconciliation of Gross Profit, GAAP to Gross Profit, Non-GAAP
(Unaudited)
|
(In thousands)
|
|
|
| |
| |
| | |
Thirteen Weeks Ended
| |
Thirty-Nine Weeks Ended
|
| | |
November 29, 2014
|
|
November 30, 2013
| |
November 29, 2014
|
|
November 30, 2013
|
Gross profit, GAAP
| | |
$
|
111,754
|
|
|
28.2
|
%
| |
$
|
107,848
|
|
|
29.6
|
%
| |
$
|
395,754
|
|
|
31.2
|
%
| |
$
|
361,180
|
|
|
31.4
|
%
|
Start-up costs
| | |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
5,758
|
| |
0.5
|
|
Gross profit, Non-GAAP
| | |
$
|
111,754
|
| |
28.2
|
%
| |
$
|
107,848
|
| |
29.6
|
%
| |
$
|
395,754
|
| |
31.2
|
%
| |
$
|
366,938
|
| |
31.9
|
%
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
Reconciliation of Selling, General and Administrative Expenses, GAAP
to
|
Selling, General and Administrative Expenses, Non-GAAP (Unaudited)
|
(In thousands)
|
|
|
| |
| |
| | |
Thirteen Weeks Ended
| |
Thirty-Nine Weeks Ended
|
| | |
November 29, 2014
|
|
November 30, 2013
| |
November 29, 2014
|
|
November 30, 2013
|
Selling, general and administrative expenses, GAAP
| | |
$
|
114,923
| |
|
29.0
|
%
| |
$
|
104,092
|
|
|
28.6
|
%
| |
$
|
335,701
| |
|
26.5
|
%
| |
$
|
306,903
| |
|
26.7
|
%
|
Employee resignation costs
| | |
(842
|
)
| |
(0.2
|
)
| |
—
| | |
—
| | |
(842
|
)
| |
(0.1
|
)
| |
—
| | |
—
| |
Start-up costs
| | |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
(2,202
|
)
| |
(0.2
|
)
|
Selling, general and administrative expenses, Non-GAAP
| | |
$
|
114,081
|
| |
28.8
|
%
| |
$
|
104,092
|
| |
28.6
|
%
| |
$
|
334,859
|
| |
26.4
|
%
| |
$
|
304,701
|
| |
26.5
|
%
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
Reconciliation of Operating (Loss) Income, GAAP to Operating (Loss)
Income, Non-GAAP (Unaudited)
|
(In thousands)
|
|
|
| |
| |
| | |
Thirteen Weeks Ended
| |
Thirty-Nine Weeks Ended
|
| | |
November 29, 2014
|
|
November 30, 2013
| |
November 29, 2014
|
|
November 30, 2013
|
Operating (loss) income, GAAP
| | |
$
|
(3,631
|
)
|
|
(0.9
|
)%
| |
$
|
2,749
|
|
|
0.8
|
%
| |
$
|
56,898
|
|
|
4.5
|
%
| |
$
|
53,067
|
|
|
4.6
|
%
|
Impairment charges and store closing costs
| | |
462
| | |
0.1
| | |
1,007
| | |
0.2
| | |
3,155
| | |
0.2
| | |
1,210
| | |
0.1
| |
Employee resignation costs
| | |
842
| | |
0.2
| | |
—
| | |
—
| | |
842
| | |
0.1
| | |
—
| | |
—
| |
Start-up costs
| | |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
7,960
|
| |
0.7
|
|
Operating (loss) income, Non-GAAP
| | |
$
|
(2,327
|
)
| |
(0.6
|
)%
| |
$
|
3,756
|
| |
1.0
|
%
| |
$
|
60,895
|
| |
4.8
|
%
| |
$
|
62,237
|
| |
5.4
|
%
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
Reconciliation of Income Tax (Benefit) Expense, GAAP to Income Tax
(Benefit) Expense, Non-GAAP (Unaudited)
|
(In thousands)
|
|
|
| |
| |
| | |
Thirteen Weeks Ended
| |
Thirty-Nine Weeks Ended
|
| | |
November 29, 2014
|
|
November 30, 2013
| |
November 29, 2014
|
|
November 30, 2013
|
Income tax (benefit) expense, GAAP
| | |
$
|
(6,126
|
)
|
|
(1.5
|
)%
| |
$
|
1,161
|
|
|
0.4
|
%
| |
$
|
17,595
|
|
|
1.4
|
%
| |
$
|
20,796
|
|
|
1.8
|
%
|
Tax affect of:
| | | | | | | | | | | | | | | | | | | | | | | | | |
Impairment charges and store closing costs
| | |
178
| | |
—
| | |
393
| | |
—
| | |
1,215
| | |
0.1
| | |
473
| | |
—
| |
Employee resignation costs
| | |
324
| | |
0.1
| | |
—
| | |
—
| | |
324
| | |
—
| | |
—
| | |
—
| |
Start-up costs
| | |
—
| | |
—
| | |
—
| | |
—
| | |
—
| | |
—
| | |
3,109
| | |
0.3
| |
One-time tax benefit
| | |
4,313
|
| |
1.1
|
| |
—
|
| |
—
|
| |
4,313
|
| |
0.3
|
| |
—
|
| |
—
|
|
Income tax (benefit) expense, Non-GAAP
| | |
$
|
(1,311
|
)
| |
(0.3
|
)%
| |
$
|
1,554
|
| |
0.4
|
%
| |
$
|
23,447
|
| |
1.8
|
%
| |
$
|
24,378
|
| |
2.1
|
%
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
Reconciliation of Net Income Attributable to The Finish Line, Inc.,
GAAP to
|
Net (Loss) Income Attributable to The Finish Line, Inc., Non-GAAP
(Unaudited)
|
(In thousands)
|
|
|
| |
| |
| | |
Thirteen Weeks Ended
| |
Thirty-Nine Weeks Ended
|
| | |
November 29, 2014
|
|
November 30, 2013
| |
November 29, 2014
|
|
November 30, 2013
|
Net income attributable to The Finish Line, Inc., GAAP
| | |
$
|
2,578
| |
|
0.7
|
%
| |
$
|
2,318
|
|
|
0.6
|
%
| |
$
|
41,170
| |
|
3.2
|
%
| |
$
|
33,900
|
|
|
2.9
|
%
|
Impairment charges and store closing costs, net of income taxes*
| | |
284
| | |
0.1
| | |
614
| | |
0.2
| | |
1,884
| | |
0.1
| | |
737
| | |
0.1
| |
Employee resignation costs, net of income taxes
| | |
518
| | |
0.1
| | |
—
| | |
—
| | |
518
| | |
0.1
| | |
—
| | |
—
| |
Start-up costs, net of income taxes
| | |
—
| | |
—
| | |
—
| | |
—
| | |
—
| | |
—
| | |
4,851
| | |
0.4
| |
One-time tax benefit
| | |
(4,313
|
)
| |
(1.1
|
)
| |
—
|
| |
—
|
| |
(4,313
|
)
| |
(0.3
|
)
| |
—
|
| |
—
|
|
Net (loss) income attributable to The Finish Line, Inc., Non-GAAP
| | |
$
|
(933
|
)
| |
(0.2
|
)%
| |
$
|
2,932
|
| |
0.8
|
%
| |
$
|
39,259
|
| |
3.1
|
%
| |
$
|
39,488
|
| |
3.4
|
%
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
* Net of decrease to net loss attributable to redeemable noncontrolling
interest for the thirty-nine weeks ended November 29, 2014 related to
impairment charges of $56.
|
Reconciliation of Diluted Earnings Per Share Attributable to The
Finish Line, Inc. Shareholders, GAAP to
|
Diluted (Loss) Earnings Per Share Attributable to The Finish Line,
Inc. Shareholders, Non-GAAP (unaudited)
|
|
|
| |
| |
| | |
Thirteen Weeks Ended
| |
Thirty-Nine Weeks Ended
|
| | |
November 29,
|
|
November 30,
| |
November 29,
|
|
November 30,
|
| | |
2014
| |
2013
| |
2014
| |
2013
|
Diluted earnings per share attributable to The Finish Line, Inc.
shareholders, GAAP
| | |
$
|
0.05
| | |
$
|
0.05
| | |
$
|
0.85
| | |
$
|
0.69
|
Impairment charges and store closing costs, net of income taxes and
redeemable noncontrolling interest
| | |
0.01
| | |
0.01
| | |
0.04
| | |
0.01
|
Employee resignation costs, net of income taxes
| | |
0.01
| | |
—
| | |
0.01
| | |
—
|
Start-up costs, net of income taxes
| | |
—
| | |
—
| | |
—
| | |
0.10
|
One-time tax benefit
| | |
(0.09
|
)
| |
—
|
| |
(0.09
|
)
| |
—
|
Diluted (loss) earnings per share attributable to The Finish Line,
Inc. shareholders, Non-GAAP
| | |
$
|
(0.02
|
)
| |
$
|
0.06
|
| |
$
|
0.81
|
| |
$
|
0.80
|
| | | | | | | | | | | | | | | |
|
Note: See Disclosure Regarding Non-GAAP Measures above.
Contacts:
The Finish Line, Inc.
Media Contact:
Dianna
Boyce, Corporate Communications, 317-613-6577
or
Investor
Contact:
Ed Wilhelm, Chief Financial Officer, 317-613-6914
Source: The Finish Line, Inc.
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