The Finish Line Inc.'s sales decreased 4.9% in the fourth quarter ended Feb. 28, to $364.1 million from $382.8 million a year ago. Consolidated comps were down 3.9%. By concept, comps were down 2.3% at Finish Line and 25% at Man Alive. The company reported a loss from continuing operations of $1.2 million, or 3 cents a share, in the three months compared to a loss from continuing operations of $39.0 million, or 83 cents, the prior year.
The company's fourth quarter results include pre-tax non-cash impairment charges of $32.6 million and pre-tax income of $2.1 million relating to the final resolution of transaction expenses associated with the terminated merger. The pre-tax non-cash impairment charges consisted of $12.1 million for goodwill and tradename acquired as part of the Man Alive acquisition in January 2005, $14.4 million for the write-down of 55 underperforming Man Alive stores' assets and $6.1 million for the write-down of 17 underperforming Finish Line stores' assets. The prior year's results include a charge for expenses incurred in connection with the Genesco settlement and a non-cash impairment charge.
Excluding these items, Q4 income from continuing operations was $19.6 million, or 36 cents per share, as compared to $21.3 million, or 45 cents, for Q4 LY. This represents a $1.7 million decrease in non-GAAP income from continuing operations, or 8.0%.
Merchandise inventories on a consolidated basis were $239.4 million at February 28, 2009 compared to $268.3 million at March 1, 2008. As of February 28, 2009, consolidated inventories decreased 8% on a per square foot basis compared to March 1, 2008. By concept, Finish Line inventories decreased 8% and Man Alive inventories decreased 16% compared to one year ago.
FULL YEAR RESULTS
For Fiscal 2009, consolidated net sales were $1.262 billion versus $1.277 billion a year ago. Consolidated comparable store net sales decreased 0.4%. By concept, Finish Line comparable store net sales increased 0.3% and Man Alive comparable store net sales decreased 11.7%.
For Fiscal 2009, the company reported income from continuing operations of $4.0 million as compared to a loss from continuing operations of $48.5 million for Fiscal 2008. The company's Fiscal 2009 results include non-cash impairment charges along with income relating to the final resolution of transaction expenses associated with the terminated merger, as discussed above. Fiscal 2008 results include a charge for expenses incurred in connection with the Genesco settlement and a non-cash impairment charge.
Excluding these items, Fiscal 2009 income from continuing operations was $24.9 million, or $0.46 per diluted share, as compared to $17.7 million, or $0.37 per diluted share for Fiscal 2008. This is an increase of $7.2 million or 40.8%.
Glenn S. Lyon, chief executive officer of the company, stated, “I am pleased to report that, while the quarter remained challenging, we delivered significantly improved fiscal year results despite the difficult operating environment. Excluding impairment and terminated merger costs, our Fiscal 2009 income from continuing operations increased 41% compared to last fiscal year. Also, our gross profit was up 70 basis points for Fiscal 2009. While we still have work to do, these results show that we are taking the right actions to weather the challenges our industry is facing and are better positioning the company to drive even stronger results as consumers regain their confidence.”
The company noted that it closed the year with $115.9 million of cash and short-term investments and no interest-bearing debt.
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 28, March 1, February 28, March 1,
2009 2008 2009 2008
------------ ---------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited)
Net sales $364,148 $382,753 $1,262,263 $1,277,162
Cost of sales
(including
occupancy costs) 248,617 259,563 886,309 905,726
------- ------- ------- -------
Gross profit 115,531 123,190 375,954 371,436
Selling, general and
administrative
expenses 83,451 88,862 335,160 342,234
Terminated
merger-related
(income)
costs, net (2,075) 81,471 (1,969) 91,354
Impairment charge 32,588 5,661 32,588 5,661
------ ----- ------ -----
Operating
income (loss) 1,567 (52,804) 10,175 (67,813)
Interest income, net 128 457 821 1,380
--- --- --- -----
Income (loss) from
continuing
operations before
income taxes 1,695 (52,347) 10,996 (66,433)
Income tax expense
(benefit) 2,900 (13,305) 6,959 (17,931)
----- ------- ----- -------
(Loss) income from
continuing operations (1,205) (39,042) 4,037 (48,502)
Loss from discontinued
operations, net of
income tax benefit (156) (147) (279) (12,310)
---- ---- ---- -------
Net (loss) income $(1,361) $(39,189) $3,758 $(60,812)
======= ======== ====== ========
(Loss) income per
diluted share:
(Loss) income
from continuing
operations $(0.03) $(0.83) $0.07 $(1.03)
Loss from
discontinued
operations - - - (0.26)
----- ----- ----- -----
Net (loss)
income $(0.03) $(0.83) $0.07 $(1.29)
====== ====== ===== ======
Diluted weighted
average shares
outstanding 54,026 47,251 54,487 47,196
====== ====== ====== ======
Dividends declared
per share $0.030 $- $0.090 $0.025
====== == ====== ======
Number of stores open
at end of period:
Finish Line 689 697
Man Alive 85 94
-- --
Total 774 791
