Sales at Man
Alive, which is being exited, decreased 45.5% to $8.1 million from $14.9
million with comps down 39.1%. On June 22, the company agreed to pay $7 million
in cash to Man Alive Acquisition LLC, which is controlled by Jimmy Jazz stores
owner and operator Jimmy Khezrie, to assume certain Man Alive assets and
liabilities.
The
agreement includes Man Alive's 75 retail stores under the Man Alive and Decibel
names, trademarks, leasehold interests and lease liabilities.
For Q1,
the company reported a consolidated pre-tax operating loss of $0.9 million
compared to pre-tax operating income of $1.7 million for Q1 LY. By concept,
Finish Line generated pre-tax operating income of $3.0 million for Q1 compared
to $4.1 million a year ago. Man Alive posted a pre-tax operating loss of $3.9
million for Q1 compared to a pre-tax operating loss of $2.4 million in the prior-year period.
Consolidated
merchandise inventories decreased 14% to $241.6 million at May 30 compared to $281.2 million a year ago. On a comparable per square foot
basis, consolidated merchandise inventories at May 30, 2009 decreased 10%. By
concept, Finish Line decreased 10% and Man Alive decreased 23%.
As of May
30, the company had no interest-bearing debt and $119 million in cash and
cash equivalents, up from $40 million at May 31, 2008.
“Our
core Finish Line business has performed as expected against the backdrop of a
challenging economy and a difficult comparison to the same quarter of last
year,” said Glenn S. Lyon, CEO. “Although the economic downturn has
changed consumer behavior, we're developing and implementing strategies to
drive profitable growth in this environment. We believe that these initiatives,
together with a continued focus on cost controls and a strong balance sheet,
provide the foundation we need to successfully manage through this environment
and drive stronger returns as market conditions improve.”
Lyon
continued, “We are pleased that we have announced a plan, and entered into
a definitive agreement, to exit the unprofitable Man Alive business. This
transaction will allow us to focus our time and resources on continuing to
improve our core Finish Line business as Man Alive joins the Jimmy Jazz
team.”
The Finish Line, Inc.
Consolidated Statements of Operations (Unaudited)
(In thousands, except per share and store data)
Thirteen Weeks Ended
--------------------
May 30, May 31,
2009 2008
------- -------
Net sales $267,229 $287,939
Cost of sales (including occupancy
costs) 190,171 204,812
------- -------
Gross profit 77,058 83,127
Selling, general, and administrative
expenses 77,983 81,427
------- -------
Operating (loss) income (925) 1,700
Interest income, net 104 255
------- -------
(Loss) income from continuing
operations before income taxes (821) 1,955
Income tax (benefit) expense (215) 1,090
------- -------
(Loss) income from continuing
operations (606) 865
(Loss) income from discontinued
operations, net of income taxes (2) 3
------- -------
Net (loss) income $(608) $868
======= =======
(Loss) income per diluted share:
(Loss) income from continuing
operations $(0.01) $0.02
(Loss) income from discontinued
operations - -
------- -------
Net (loss) income $(0.01) $0.02
======= =======
Diluted weighted average shares
outstanding 54,153 53,895
======= =======
Dividends declared per share $0.03 $-
======= =======
Number of stores open at end of period:
Finish Line 684 700
Man Alive 76 94
------- -------
Total 760 794
======= =======
