The Finish Line, Inc. reported fourth quarter net sales increased 16% (sixteen percent) to $234.4 million for the thirteen weeks ended March 1, 2003 (the “fourth quarter” or “Q4”) compared to $201.6 million reported for the thirteen weeks last year ended March 2, 2002 (“Q4 LY”). Comparable store net sales increased 10% (ten percent) for Q4 on top of an 8% (eight percent) increase reported for Q4 LY.
On a GAAP basis, net income for Q4 was $15.4 million or $.66 per diluted share versus $.36 per diluted share in Q4 LY, an increase of 83%. In the fourth quarter the Company realized a benefit from a gain on a tornado insurance settlement of $.20 per diluted share less asset impairment charges in Q4 of $.04 per diluted share. The Company reported net income for Q4 LY of $9.0 million or $.36 per diluted share that included the benefit from repositioning reversals of $.02 per diluted share. Excluding these items noted above, non-GAAP adjusted diluted earnings per share on a comparable basis to which previous guidance has been provided by the Company would have been $.50 per share in Q4 versus $.34 in Q4 LY, or an increase of 47%.
Diluted weighted average shares outstanding were 23,344,000 for the thirteen weeks ended March 1, 2003, versus 24,750,000 shares outstanding for the thirteen weeks ended March 2, 2002.
Net sales increased 8% (eight percent) to $757.2 million for the fifty-two weeks ended March 1, 2003 (“Fiscal 2003”) compared to $701.4 million for the fifty-two weeks ended March 2, 2002 (“Fiscal 2002”). Comparable store net sales increased 3% (three percent) for Fiscal 2003 on top of a 4% (four percent) increase for Fiscal 2002.
On a GAAP basis, net income for Fiscal 2003 was $25.0 million or $1.03 per diluted share versus $.75 per diluted share for Fiscal 2002. Included in Fiscal 2003 is the benefit from the gain on the insurance settlement of $.19 per diluted share and repositioning reversal of $.03 per diluted share less asset impairment charges of $.04 per diluted share. The Company reported net income for Fiscal 2002 of $18.4 million or $.75 per diluted share that included a benefit from repositioning reversals of $.05 per diluted share. Excluding these items noted above, Fiscal 2003 non-GAAP adjusted net income per diluted share on a comparable basis to which previous guidance has been provided by the Company would have been $.85 versus $.70 in Fiscal 2002, or an increase of 21%.
Diluted weighted average shares outstanding were 24,221,000 for the fiscal year ended March 1, 2003, versus 24,683,000 shares outstanding for the fiscal year ended March 2, 2002.
Merchandise inventories were $158.8 million at March 1, 2003 compared to $141.9 million at March 2, 2002. On a per square foot basis merchandise inventories at fiscal year end increased approximately 6% (six percent) compared to one year ago.
The Company operated 477 stores at March 1, 2003, an increase of 6% (six percent) over the 449 stores operated one year ago. For the year, the Company opened 37 new stores, remodeled 13 existing stores and closed 9 stores. Total retail square footage increased 5% (five percent) to 2,839,000 at March 1, 2003 versus 2,694,000 at March 2, 2002.
Mr. Cohen stated, “We are pleased to report an 83% increase (GAAP basis) in diluted earnings per share and a 47% increase in non-GAAP adjusted earnings per share for the fourth quarter of Fiscal 2003 versus the fourth quarter of Fiscal 2002. In addition, our non-GAAP adjusted diluted income per share of $.50 (prior to the gain from insurance settlement net of asset impairment charges) is slightly better than the guidance range of $.47 – $.49 we announced in our March 6th sales release. We made progress in all line items of the income statement with SG&A expenses improving 60 basis points, occupancy costs improving 40 basis points in addition to product margins which also improved 40 basis points.
“Our balance sheet remains strong with $73.9 million in cash and marketable securities and no interest bearing debt. Our stockholders equity is $259.5 million, which equates to $10.71 per diluted share. We are well positioned and optimistic as we go forward into Fiscal 2004.”
With the improved Q4 and Fiscal 2003 results, the Company announced it has increased diluted earnings per share (on a GAAP basis) guidance for Q4 of Fiscal 2004 to a range of $.54 to $.56 from $.51 to $.53 and full year Fiscal 2004 to a range of $.99 to $1.03 from $.96 to $1.00. In addition, the Company announced it has raised it’s projected new store opening plan from 45 to 50 resulting in a square footage increase of approximately 7% for Fiscal 2004.
The Finish Line, Inc.
Consolidated Statements of Income (Unaudited)
(In thousands, except per share and store data)
Thirteen Thirteen Fifty-two Fifty-two
Weeks Weeks Weeks Weeks
Ended Ended Ended Ended
March 1, March 2, March 1, March 2,
2003 2002 2003 2002
---------- --------- --------- ---------
Net Sales $234,426 $201,559 $757,159 $701,426
Cost of Sales (including
occupancy expenses) 164,400 142,944 542,303 508,533
---------- --------- --------- ---------
Gross profit 70,026 58,615 214,856 192,893
Selling, general, and
administrative expenses 51,716 45,643 183,072 167,681
Insurance settlement (7,382) - (7,382) -
Asset impairment charge 1,364 - 1,364 -
Repositioning charge (reversal) - (794) (1,126) (2,003)
Interest income - net 140 285 814 1,610
---------- --------- --------- ---------
Income before income taxes 24,468 14,051 39,742 28,825
Income taxes 9,053 5,058 14,705 10,377
---------- --------- --------- ---------
Net income $15,415 $8,993 $25,037 $18,448
Reconciliation of GAAP net income
to non-GAAP adjusted net income
------------------------------------
GAAP net income $15,415 $8,993 $25,037 $18,448
Adjustments to GAAP income:
Insurance settlement (7,382) - (7,382) -
Asset impairment charges 1,364 - 1,364 -
Repositioning charge (reversal) - (1,008) (1,126) (1,715)
---------- --------- --------- ---------
9,397 7,985 17,893 16,733
Tax effect 2,227 363 2,643 617
---------- --------- --------- ---------
Non-GAAP adjusted net income 11,624 8,348 20,536 17,350
