Finish Line Q3 Net Loss Widens as Comps Decrease

The Finish Line, Inc. announced net sales increased 4% to $147.9 million for the thirteen weeks ended November 30, 2002 compared to $142.3 million reported for the thirteen weeks last year ended December 1, 2001. Comparable store net sales decreased 1% for Q3.

Net loss for Q3 was $3.2 million or $.13 per diluted share as compared to a loss of $1.8 million or $.07 per diluted share (including a $.02 benefit from repositioning reversals) reported for Q3 LY. Diluted weighted average shares outstanding were 23,659,000 for Q3 versus 24,549,000 shares outstanding for Q3 LY.

Net sales increased 5% to $522.7 million for the thirty- nine weeks ended November 30, 2002 compared to $499.9 million for the thirty-nine weeks last year ended December 1, 2001. Comparable store net sales increased approximately 1% for YTD.

Net income YTD increased 2% to $9.6 million compared to net income of $9.5 million for YTD LY. Diluted earnings per share were $.39 which is an increase of 3% compared to $.38 per diluted share reported YTD LY. Diluted weighted average shares outstanding were 24,514,000 for the thirty-nine weeks ended November 30, 2002, versus 24,660,000 shares outstanding for YTD LY.

Merchandise inventories were $180.9 million at November 30, 2002 compared to $167.1 million at December 1, 2001. On a per square foot basis merchandise inventories at the end of Q3 increased approximately 3% compared to one year ago.

The Company operated 481 stores at November 30, 2002, an increase of 6% over the 454 stores operated one year ago. For the year, the Company has opened 37 new stores; remodeled 13 existing stores and closed 5 stores. Total retail square footage increased 5% to 2,858,000 at November 30, 2002 versus 2,717,000 square feet at the end of Q3 LY.

Mr. Cohen stated, “Our diluted loss per share of $.13 is within the range of our previous guidance of $.11 – $.13. Our sales performance during the third quarter was on plan, but remained promotional. Sales for the Holiday Season, which is the first period of our fourth quarter, slightly exceeded plan with margins on plan in spite of the continued promotional environment.

“Our balance sheet remains strong with over $37 million in cash and marketable securities and no interest bearing debt. Our stockholders equity is $243.8 million, which equates to $9.94 per diluted share and we are well positioned financially to remain flexible and strong.”