The Finish Line, Inc. reported a loss from continuing operations of $38.6 million, or 82 cents a share for the fourth quarter, versus income from continuing operations of $25.8 million or 54 cents, a year ago. Consolidated net sales from continuing operations for the quarter slumped 10.5% to $382.8 million from $425.7 million; same-store sales fell 6%.
For Q4, the non-GAAP income from continuing operations per diluted share was 45 cents as compared to 51 cents for Q4 LY. The Q4 non-GAAP income from continuing operations excludes a pretax charge of $81.5 million ($1.20 per diluted share) for costs related to the Genesco merger litigation and settlement. Also excluded is a pre-tax charge of $5.7 million (7 cents per diluted share) for the non-cash impairment charge to write down long-lived assets for 26 stores pursuant to SFAS No 144. For Q4 LY, the company has excluded a pretax charge of $3.6 million (5 cents per diluted share) for non-cash asset impairment charges and excluded the estimated 8 cents per diluted share benefit, which was a result of the additional week in Q4 LY.
Diluted weighted average shares outstanding were 47,251,000 for Q4 versus 47,557,000 shares outstanding for Q4 LY.
Alan H. Cohen, chairman and CEO, stated, “Our fourth quarter sales reflected the challenging environment for retail in general. In the Finish Line stores we did not meet our sales expectations, but did drive higher product margins and ended the year with inventory down 4% on a per square foot basis. We continued our focus on a premium product presentation being the best in class, trend right, and the customers' first choice for the brands and products we carry. Our product presentation continues to evolve and improve in both athletic performance and sport style product. As we begin the new fiscal year, our financial position remains strong with a current net cash balance of over $50 million after completing payment of our portion of the Genesco settlement agreement.”
FULL YEAR RESULTS:
For Fiscal 2008, the company reported a net loss from continuing operations of $48.1 million or $1.02 per diluted share as compared to income from continuing operations of $40.3 million or 84 cents per diluted share for Fiscal 2007.
For Fiscal 2008, the non-GAAP income from continuing operations per diluted share was $.37 as compared to $.81 for Fiscal 2007. The non-GAAP income from continuing operations excludes a pretax charge of $91.4 million ($1.32 per diluted share) for costs related to the Genesco acquisition, merger litigation and settlement costs. Also excluded is a pre-tax charge of $5.7 million (7 cents per diluted share) for the non-cash impairment charge to write down long-lived assets for 26 stores pursuant to SFAS No 144. For the prior fiscal year, the company has excluded a pretax charge of $3.6 million (5 cents per diluted share) for non-cash asset impairment charges and the estimated 8 cents per diluted share benefit, which was a result of the additional week in Fiscal 2007.
Diluted weighted average shares outstanding were 47,196,000 for Fiscal 2008 versus 47,801,000 shares outstanding for Fiscal 2007.
For Fiscal 2008, consolidated net sales from continuing operations were $1.277 billion versus consolidated net sales from continuing operations of $1.332 billion for Fiscal 2007. Comparable store net sales decreased 4.7% for the fifty-two week period ended March 1, 2008, compared to the fifty-two week period last year ended March 3, 2007.
Merchandise inventories on a consolidated basis declined to $268.3 million at March 1, 2008 compared to $287.3 million at March 3, 2007. On a per square foot basis, consolidated inventories decreased 7%. Finish Line store merchandise inventories decreased 4% compared to one year ago.
FUTURE SALES REPORTING:
The company plans to discontinue the practice of reporting quarterly sales information in a separate release prior to the reporting of its quarterly earnings. The company believes that the simultaneous release of quarterly earnings and sales information in one press release is a practice that is becoming more common among industry peers, and is also consistent with best practices. Thus, beginning with the first quarter of Fiscal 2009, the company will issue one press release that will report both sales and earnings for that period.
The Finish Line, Inc.
Consolidated Statements of Operations
(In thousands, except per share and store data)Thirteen Fourteen
Weeks Weeks Fifty-two Fifty-three
Ended Ended Weeks Ended Weeks Ended
March 1, March 3, March 1, March 3,
2008 2007 2008 2007
(Unaudited) (Unaudited) (Unaudited)
———– ———– ———– ———–
Net sales $382,753 $425,717 $1,277,162 $1,331,959
Cost of sales
(including occupancy
expenses) 259,563 289,521 905,726 929,693
———– ———– ———– ———–
Gross profit 123,190 136,196 371,436 402,266Selling, general, and
administrative expenses 88,862 91,495 342,234 335,019
Terminated merger
related costs 81,471 – 91,354 0
Asset impairment charge 5,661 3,559 5,661 3,559
———– ———– ———– ———–
Operating (loss) income (52,804) 41,142 (67,813) 63,688Interest income, net 457 157 1,380 1,021
———– ———– ———– ———–
(Loss) income from
continuing operations
before income taxes (52,347) 41,299 (66,433) 64,709
Income tax (benefit)
expense (13,732) 15,494 (18,358) 24,445
———– ———– ———– ———–
(Loss) income from
continuing operations (38,615) 25,805 (48,075) 40,264
Loss from discontinued
operations, net of
income tax benefit (147) (4,738) (12,310) (7,900)
———– ———– ———– ———–
Net (loss) income $(38,762) $21,067 $(60,385) $32,364
=========== =========== =========== ===========
(Loss) income per
diluted share:
(Loss) income from
continuing operations $(0.82) $0.54 $(1.02) $0.84
Loss from discontinued
operations – (0.10) (0.26) (0.16)
———– ———– ———– ———–
Net (loss) income $(0.82) $0.44 $(1.28) $0.68
=========== =========== =========== ===========
Diluted weighted average
shares outstanding 47,251 47,557 47,196 47,801
=========== =========== =========== ===========Dividends declared per share $- $0.025 $0.025 $0.100
=========== =========== =========== ===========
Number of stores open
at end of period:
Finish Line 697 690
Man Alive 94 86
Paiva – 13
———– ———–
Total 791 789
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