Finish Line Reports Fourth Quarter and Fiscal Year 2010 Results
Q4 same-store sales up 10% and Q4 EPS up 56% to $0.56 per share
INDIANAPOLIS, March 25 /PRNewswire-FirstCall/ -- The Finish Line, Inc. (Nasdaq: FINL) today reported results for the fourth quarter and fiscal year 2010, representing the 13-week and 52-week periods ended February 27, 2010.
Fourth Quarter Results
Net sales increased 8.9% to $374.5 million in the fourth quarter compared to $344.1 million a year ago. Comparable store net sales increased 10.0% in the fourth quarter compared to a 2.3% comparable store net sales decline for the same period a year ago.
For the period, the company reported income from continuing operations of $30.8 million, or $0.56 per diluted share compared to $19.7 million or $0.36 per diluted share a year ago, a 55.6% earnings per share increase. Fiscal fourth quarter 2010 results included $2.6 million of pre-tax income associated with a change in the estimate for gift card forfeitures (which is included in net sales but not in the comparable store net sales), as well as a $6.8 million pre-tax, non-cash charge related to store asset impairments. Prior year fourth quarter results included a pre-tax, non-cash charge of $6.1 million for store asset impairments and pre-tax income of $2.1 million related to the terminated merger. Excluding these items, non-GAAP income from continuing operations for the current period was $33.3 million or $0.61 per diluted share compared to $22.1 million or $0.41 per diluted share for the same period a year ago, representing a 48.8% earnings per share increase. A reconciliation of these GAAP to non-GAAP financial measures is found in the tables at the end of this news release.
Consolidated merchandise inventories decreased 20.3% to $190.9 million as of February 27, 2010 compared to $239.4 million a year ago. Finish Line inventory declined 18.2% overall and 14.7% on a per-square-foot basis.
At year-end, the company had no interest-bearing debt and $234.5 million in cash and cash equivalents, up from $115.9 million at the end of the fourth quarter a year ago. The company repurchased 1.4 million shares of its outstanding common stock in the fourth quarter totaling $15.9 million.
Full Fiscal Year 2010 Results
For the 52 weeks ended February 27, 2010, net sales declined 1.9% to $1.17 billion compared to $1.19 billion last year. For the fiscal year, comparable store net sales decreased 0.5% compared to a 0.3% increase last year.
For fiscal 2010, the company reported income from continuing operations of $50.8 million or $0.92 per diluted share compared to income from continuing operations of $30.4 million or $0.55 per diluted share for the same period a year ago, a 67.3% earnings per share increase. Fiscal 2010 full year results included the $2.6 million of pre-tax income for gift card forfeitures, the $6.8 million pre-tax, non-cash store asset impairment charge and the previously announced third quarter one-time tax benefit of $6.5 million related to the terminated merger and related litigation. Prior year results included a pre-tax non-cash charge of $6.1 million for store asset impairments and pre-tax income of $2.0 million related to the terminated merger. Excluding these items, fiscal 2010 non-GAAP income from continuing operations for the current period was $46.8 million or $0.85 per diluted share compared to $32.9 million or $0.60 per diluted share for the same period a year ago, representing a 41.7% earnings per share increase. A reconciliation of these GAAP to non-GAAP financial measures is found in the tables at the end of this news release.
“I’m proud of the excellent work our team did to achieve improved results in virtually all facets of our business,” said Finish Line Chief Executive Officer Glenn Lyon. “We successfully executed our strategy to drive increased sales and margin improvement while strategically managing inventory and controlling costs. We’re pleased that customers continue to respond to our premium positioning as well as our cross-channel strategy, which is always evolving to stay in-step with the lifestyles of our core customers. It is our view that shoppers will likely remain cautious, yet we are encouraged by our results and will stay on-strategy as we continue to focus on delivering value to our shareholders.”
March Sales Update
Comparable store net sales on a month-to-date basis for the period of February 28 through March 21 increased 15.5% compared to a 1.2% decline for the same period one year ago.
Q4/Full Year 2010 Conference Call Tomorrow, March 26
The company will host a conference call for investors Friday, March 26, 2010 at 8:30 a.m. Eastern. To participate in the conference call, dial (866) 923-8645, conference ID#61214460. To listen online, visit www.finishline.com. A replay of the conference call can be accessed approximately 30 minutes following the completion of the call at (706) 645-9291, conference ID#61214460. This recording will be made available through March 30. In addition, the replay will be available on the Web at www.finishline.com.
Q1 FY 2011 Release/Conference Call Date June 24/25
The company expects to report first quarter results June 24 after market close followed by a conference call June 25 at approximately 8:30 a.m. Eastern.
Annual Meeting Date July 22
The company’s Board of Directors has established July 22 as the fiscal 2010 annual meeting date and May 21 as the record date for this meeting.
About Finish Line
The Finish Line, Inc. is a premium athletic footwear store and one of the nation's largest mall-based specialty retailers, offering a large selection of performance and everyday sport footwear, apparel and accessories for men, women and kids. The Finish Line, Inc. is publicly traded on the NASDAQ Global Select Market under the symbol FINL. The company operates 666 Finish Line stores in 47 states and offers online shopping at www.finishline.com.
Forward Looking Statements
The company has experienced, and expects to continue to experience, significant variability in net sales, net income (loss) 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 results of the company to differ materially include, but are not limited to: 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; the effect of economic conditions, depressed demand in the housing market and unemployment rates; management of growth, the outcome of litigation, and the other risks detailed in the company's Securities and Exchange Commission filings.
Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. 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.
Consolidated Statements of Operations
(In thousands, except per share and store data)
Thirteen Thirteen Fifty-Two Fifty-Two
Weeks Ended Weeks Ended Weeks Ended Weeks Ended
February 27, February 28, February 27, February 28,
2010 2009 2010 2009
---- ---- ---- ----
(Unaudited) (Unaudited) (Unaudited)
Net sales $374,530 $344,067 $1,172,415 $1,194,657
Cost of sales
(including
occupancy costs) 238,326 229,855 793,556 828,139
------- ------- ------- -------
Gross profit 136,204 114,212 378,859 366,518
Selling, general and
administrative
expenses 78,559 77,778 297,323 312,011
Store closing costs 560 242 2,707 492
Terminated merger-
related income, net - (2,075) - (1,969)
Impairment charges 6,771 6,118 6,771 6,118
----- ----- ----- -----
Operating income 50,314 32,149 72,058 49,866
Interest income, net 45 127 322 814
-- --- --- ---
Income from continuing
operations before
income taxes 50,359 32,276 72,380 50,680
Income tax expense 19,564 12,624 21,547 20,278
------ ------ ------ ------
Income from continuing
operations 30,795 19,652 50,833 30,402
Loss from discontinued
operations, net of
income taxes (234) (21,013) (15,161) (26,644)
---- ------- ------- -------
Net income (loss) $30,561 $(1,361) $35,672 $3,758
======= ======= ======= ======
Income (loss) per
diluted share:
Income from
continuing
operations $0.56 $0.36 $0.92 $0.55
Loss from
discontinued
operations (0.01) (0.39) (0.28) (0.48)
----- ----- ----- -----
Net income (loss) $0.55 $(0.03) $0.64 $0.07
===== ====== ===== =====
Diluted weighted
average shares
outstanding 54,541 54,125 54,597 54,108
====== ====== ====== ======
Dividends declared
per share $0.04 $0.03 $0.13 $0.09
===== ===== ===== =====
Store activity for the
period (Finish Line
only):
Beginning of period 681 699 689 697
Opened - - 5 9
Closed (15) (10) (28) (17)
--- --- --- ---
End of period 666 689 666 689
=== === === ===
Square feet at
end of period 3,590,780 3,746,413
Average square feet
per store 5,392 5,437
Thirteen Weeks Ended Fifty-Two Weeks Ended
-------------------- ---------------------
February 27, February 28, February 27, February 28,
2010 2009 2010 2009
---- ---- ---- ----
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales
(including
occupancy costs) 63.6 66.8 67.7 69.3
---- ---- ---- ----
Gross profit 36.4 33.2 32.3 30.7
Selling, general and
administrative
expenses 21.0 22.6 25.4 26.1
Store closing costs 0.2 0.1 0.2 0.1
Terminated merger-
related income, net - (0.6) - (0.2)
Impairment charges 1.8 1.8 0.6 0.5
--- --- --- ---
Operating income 13.4 9.3 6.1 4.2
Interest income, net - - - -
--- --- --- ---
Income from continuing
operations before
income taxes 13.4 9.3 6.1 4.2
Income tax expense 5.2 3.6 1.8 1.7
--- --- --- ---
Income from continuing
operations 8.2 5.7 4.3 2.5
Loss from discontinued
operations, net of
income taxes - (6.1) (1.3) (2.2)
---- ---- ---- ----
Net income (loss) 8.2% (0.4)% 3.0% 0.3%
==== ===== ==== ====
Condensed Consolidated Balance Sheet
February 27, February 28,
2010 2009
---- ----
(Unaudited)
ASSETS
------
Cash and cash equivalents $234,508 $115,875
Merchandise inventories, net 190,894 239,409
Other current assets 18,205 31,791
Property and equipment, net 135,943 173,119
Other assets 30,718 38,539
------ ------
Total assets $610,268 $598,733
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities $114,943 $107,838
Deferred credits from
landlords 40,006 51,939
Other long-term liabilities 13,169 14,562
Shareholders' equity 442,150 424,394
------- -------
Total liabilities and
shareholders' equity $610,268 $598,733
======== ========
The Finish Line, Inc.
Consolidated Statements of Operations (Unaudited)
Periods Ended February 27, 2010 and February 28, 2009
(In thousands, except per share data)
Fourth Quarter Fiscal 2010 Fourth Quarter Fiscal 2009
GAAP Adjustments Non-GAAP GAAP Adjustments Non-GAAP
---- ----------- -------- ---- ----------- --------
Net sales (1) $374,530 $(2,622) $371,908 $344,067 $- $344,067
Cost of sales
(including
occupancy
costs) 238,326 - 238,326 229,855 - 229,855
------- --- ------- ------- --- -------
Gross profit 136,204 (2,622) 133,582 114,212 - 114,212
Selling, general
and
administrative
expenses 78,559 - 78,559 77,778 - 77,778
Store closing
costs 560 - 560 242 - 242
Terminated merger-
related income,
net (2) - - - (2,075) 2,075 -
Impairment
charges (3) 6,771 (6,771) - 6,118 (6,118) -
----- ------ --- ----- ------ ---
Operating
income 50,314 4,149 54,463 32,149 4,043 36,192
Interest income,
net 45 - 45 127 - 127
--- --- --- --- --- ---
Income from
continuing
operations
before
income taxes 50,359 4,149 54,508 32,276 4,043 36,319
Income tax
expense (4) 19,564 1,635 21,199 12,624 1,571 14,195
------ ------ ------ ------ ----- ------
Income from
continuing
operations 30,795 2,514 33,309 19,652 2,472 22,124
Loss from
discontinued
operations,
net of
income taxes (234) - (234) (21,013) - (21,013)
--- ---- --- ------- --- ------
Net income
(loss) $30,561 $2,514 $33,075 $(1,361) $2,472 $1,111
======= ====== ======= ======= ====== ======
Income (loss) per
diluted share:
Income from
continuing
operations $0.56 $0.05 $0.61 $0.36 $0.05 $0.41
Loss from
discontinued
operations (0.01) 0.00 (0.01) (0.39) 0.00 (0.39)
---- ---- ----- ----- ---- -----
Net income
(loss) $0.55 $0.05 $0.60 $(0.03) $0.05 $0.02
===== ===== ===== ====== ===== =====
Diluted weighted
average shares
outstanding 54,541 - 54,541 54,125 - 54,125
====== === ====== ====== === ======
Fourth Quarter Fiscal 2010 Fourth Quarter Fiscal 2009
GAAP Adjustments Non-GAAP GAAP Adjustments Non-GAAP
---- ----------- -------- ---- ----------- --------
Net sales (1) 100.0% -% 100.0% 100.0% -% 100.0%
Cost of sales
(including
occupancy
costs)(5) 63.6 0.5 64.1 66.8 - 66.8
---- --- ---- ---- --- ----
Gross profit 36.4 (0.5) 35.9 33.2 - 33.2
Selling, general
and
administrative
expenses (5) 21.0 0.1 21.1 22.6 - 22.6
Store closing
costs 0.2 - 0.2 0.1 - 0.1
Terminated merger-
related income,
net (2) - - - (0.6) 0.6 -
Impairment
charges (3) 1.8 (1.8) - 1.8 (1.8) -
--- ---- --- --- ---- ---
Operating income 13.4 1.2 14.6 9.3 1.2 10.5
Interest income,
net - - - - - -
--- --- --- --- --- ---
Income from
continuing
operations
before
income taxes 13.4 1.2 14.6 9.3 1.2 10.5
Income tax
expense (4) 5.2 0.4 5.6 3.6 0.5 4.1
--- --- --- --- --- ---
Income from
continuing
operations 8.2 0.8 9.0 5.7 0.7 6.4
Loss from
discontinued
operations,
net of
income taxes - - - (6.1) - (6.1)
--- --- --- ---- --- ----
Net income (loss) 8.2% 0.8% 9.0% (0.4)% 0.7% 0.3%
=== === === ===== === ===
Footnotes to explain adjustments
(1) Fiscal 2010 amount relates to a change in estimate for gift card
forfeitures. This amount was not included in comparable store net
sales.
(2) Fiscal 2009 amount relates to the final resolution of transaction
expenses associated with the terminated merger.
(3) Fiscal 2010 and 2009 amounts reflect charges to write down long-
lived assets of the Company.
(4) Fiscal 2010 and 2009 amounts reflect the income tax effect of the pre-
tax adjustments noted above.
(5) Due to the adjustment of net sales in Fiscal 2010 the percentages of
these items changed as a percentage of the adjusted net sales.
The Finish Line, Inc.
Consolidated Statements of Operations (Unaudited)
Periods Ended February 27, 2010 and February 28, 2009
(In thousands, except per share data)
Fiscal 2010 Fiscal 2009
GAAP Adjust- Non-GAAP GAAP Adjust- Non-GAAP
ments ments
---- ------- -------- ---- ------- --------
Net
sales (1) $1,172,415 $(2,622) $1,169,793 $1,194,657 $- $1,194,657
Cost of
sales
(including
occupancy
costs) 793,556 - 793,556 828,139 - 828,139
------- ------ ------- ------- -------Gross profit 378,859 (2,622) 376,237 366,518 - 366,518
Selling,
general and
administrative
expenses 297,323 - 297,323 312,011 - 312,011
Store closing
Costs 2,707 - 2,707 492 - 492
Terminated
merger-
related income,
net (2) - - - (1,969) 1,969 -
Impairment
charges (3) 6,771 (6,771) - 6,118 (6,118) -
------ ------ --- ----- ----- ---
Operating income 72,058 4,149 76,207 49,866 4,149 54,015
Interest income,
net 322 - 322 814 - 814
--- --- --- --- --- ---
Income from
continuing
operations before
income taxes 72,380 4,149 76,529 50,680 4,149 54,829
Income tax
expense (4) 21,547 8,150 29,697 20,278 1,613 21,891
------ ----- ------ ------ ----- ------
Income from
continuing
operations 50,833 (4,001) 46,832 30,402 2,536 32,938
Loss from
discontinued
operations,
net of
income taxes (15,161) - (15,161) (26,644) - (26,644)
------ --- ------ ------ --- ------
Net income
(loss) $35,672 $(4,001) $31,671 $3,758 $2,536 $6,294
======= ======= ======= ====== ====== ======
Income (loss) per
diluted share:
Income from
continuing
operations $0.92 $(0.07) $0.85 $0.55 $0.05 $0.60
Loss from
discontinued
operations (0.28) 0.00 (0.28) (0.48) 0.00 (0.48)
----- ---- ----- ----- ---- -----
Net income
(loss) $0.64 $(0.07) $0.57 $0.07 $0.05 $0.12
===== ====== ===== ===== ===== =====
Diluted weighted
average shares
outstanding 54,597 - 54,597 54,108 - 54,108
====== === ====== ====== === ======
Fiscal 2010 Fiscal 2009
GAAP Adjust- Non-GAAP GAAP Adjust- Non-GAAP
ments ments
---- ------ -------- ---- ------ --------
Net sales (1) 100.0% -% 100.0% 100.0% -% 100.0%
Cost of sales
(including
occupancy
costs) (5) 67.7 0.1 67.8 69.3 - 69.3
---- --- ---- ---- --- ----
Gross profit 32.3 (0.1) 32.2 30.7 - 30.7
Selling, general
and
administrative
expenses (5) 25.4 0.1 25.5 26.1 - 26.1
Store closing
costs 0.2 - 0.2 0.1 - 0.1
Terminated merger-
related income,
net (2) - - - (0.2) 0.2 -
Impairment
charges (3) 0.6 (0.6) - 0.5 (0.5) -
---- ---- --- --- --- ---
Operating
income 6.1 0.4 6.5 4.2 0.3 4.5
Interest income,
net - - - - - -
--- --- --- --- --- ---
Income from
continuing
operations before
income taxes 6.1 0.4 6.5 4.2 0.3 4.5
Income tax
expense (4) 1.8 0.8 2.6 1.7 0.1 1.8
--- --- --- --- --- ---
Income from
continuing
operations 4.3 (0.4) 3.9 2.5 0.2 2.7
Loss from
discontinued
operations,
net of income
taxes (5) (1.3) 0.1 (1.2) (2.2) - (2.2)
---- ---- ---- ---- --- ----
Net income (loss) 3.0% (0.3)% 2.7% 0.3% 0.2% 0.5%
=== ==== === === === ===
Footnotes to explain adjustments
(1) Fiscal 2010 amount relates to a change in estimate for gift card
forfeitures. This amount was not included in comparable store net
sales.
(2) Fiscal 2009 amount relates to the final resolution of transaction
expenses associated with the terminated merger.
(3) Fiscal 2010 and 2009 amounts reflect charges to write down long-lived
assets of the Company.
(4) Fiscal 2010 and 2009 amounts reflect the income tax effect of the pre-
tax adjustments noted above.
Fiscal 2010 amount also includes the one time tax benefit associated
with the terminated merger.
(5) Due to the adjustment of net sales in Fiscal 2010 the percentages of
these items changed as a percentage of the adjusted net sales.
Media Contact: |
Investor Contact: |
|
Anne Roman |
Ed Wilhelm |
|
On behalf of Finish Line |
Chief Financial Officer |
|
419-724-9900 x245 |
317-613-6914 |
|
SOURCE The Finish Line, Inc.
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