UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549


FORM 8-K


CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


Date of Report (Date of Earliest Event Reported): September 26, 2014


The Finish Line, Inc.
__________________________________________
(Exact name of registrant as specified in its charter)

Indiana
 
0-20184
 
35-1537210
(State or other jurisdiction
of incorporation)
 
(Commission File
Number)
 
(I.R.S. Employer
Identification No.)
 
 
 
 
 
3308 North Mitthoeffer Road
Indianapolis, Indiana
 
 
 

46235
(Address of principal executive offices)
 
 
 
(Zip Code)

Registrant’s telephone number, including area code: 317-899-1022

Not Applicable
______________________________________________
Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))




Item 2.02 Results of Operations and Financial Condition.

On September 26, 2014, The Finish Line, Inc. issued a press release discussing its results of operations for the thirteen and twenty-six weeks ended August 30, 2014, and its financial condition as of August 30, 2014.

A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference. The information in this Current Report, including Exhibit 99.1 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.



Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

99.1 Press Release issued September 26, 2014, regarding results of operations
    

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
 
 
The Finish Line, Inc.
 
 
 
 
 
 
 
 
Date: September 26, 2014
 
By:
/s/ Edward W. Wilhelm                
 
 
Name:
Edward W. Wilhelm
 
 
Title:
Executive Vice President, Chief Financial Officer
    

3
FL 8K 9.26.14 ex
Exhibit 99.1


Finish Line Reports Second Quarter Fiscal Year 2015 Results


INDIANAPOLIS, September 26, 2014 – The Finish Line, Inc. (NASDAQ: FINL) today reported results for the thirteen weeks ended August 30, 2014.


For the thirteen weeks ended August 30, 2014:

●
Consolidated net sales were $466.9 million, an increase of 7.1% over the prior year period.
●
Finish Line comparable store sales increased 1.5%.
●
Diluted earnings per share were $0.54 in the current and prior year.

“Our second quarter results fell short of our expectations due to softness within elements of our basketball offering while our running business was up mid single digits driven by casual and performance styles,” said Glenn Lyon, Chairman and Chief Executive Officer. “We are confident that we can reaccelerate sales trends in basketball by working closely with our brand partners to improve our assortments. In combination with our market leadership position in running, advanced omnichannel capabilities and growing business relationship with Macy’s, this will fuel sustainable sales and earnings growth over the long-term.”


Balance Sheet

As of August 30, 2014, consolidated merchandise inventories increased 11.5% to $329.9 million compared to $296.0 million as of August 31, 2013.

The company repurchased 133,333 shares of its common stock in the second quarter, totaling $3.6 million. The company has 3.1 million shares remaining on its current Board authorized repurchase program.

As of August 30, 2014, the company had no interest-bearing debt and $190.6 million in cash and cash equivalents, compared to $203.8 million in the prior year.


1

Outlook

For the fiscal year ending February 28, 2015, the company still expects Finish Line comparable store sales to be up mid single digits and earnings per share to increase in the high single to low double digit range over fiscal year 2014 non-GAAP diluted earnings per share of $1.66.


Q2 Fiscal 2015 Conference Call Today, September 26, 2014 at 8:30 a.m.

The company will host a conference call for investors today, September 26, 2014, at 8:30 a.m. Eastern. To participate in the live conference call, dial 866-923-8645 (U.S. and Canada) or 660-422-4970 (International), conference ID #2199609. The live conference call will also be accessible online at www.finishline.com. A replay of the conference call can be accessed approximately two hours following the completion of the call by dialing 855-859-2056, conference ID #2199609. This recording will be made available through Sunday, October 26, 2014. The replay will also be accessible online at www.finishline.com.

2

Disclosure Regarding Non-GAAP Measures

This report refers to certain financial measures that are identified as non-GAAP. The company believes that these non-GAAP measures, including gross profit, selling, general and administrative expenses, operating income, net income attributable to The Finish Line, Inc. and diluted earnings per share attributable to The Finish Line, Inc. shareholders, are helpful to investors because they allow for a more direct comparison of the company’s year-over-year performance and are useful in assessing the company’s progress in achieving its long-term financial objectives. This supplemental information should not be considered in isolation or as a substitute for the related GAAP measures. A reconciliation of the non-GAAP measures to the comparable GAAP measures can be found in the company’s Form 8-K filed with the Securities and Exchange Commission with this release.


About The Finish Line, Inc.

The Finish Line, Inc. is a premium retailer of athletic shoes, apparel and accessories. Headquartered in Indianapolis, Finish Line has approximately 1,020 Finish Line branded locations primarily in U.S. malls and shops inside Macy’s department stores and employs more than 14,000 sneakerologists who help customers every day connect with their sport, their life and their style. Online shopping is available at www.finishline.com and www.macys.com. Mobile shopping is available at m.finishline.com. Follow Finish Line on Twitter at Twitter.com/FinishLine and “like” Finish Line on Facebook at Facebook.com/FinishLine.

Finish Line also operates the Running Specialty Group. This includes 58 specialty running stores in 12 states and the District of Columbia under The Running Company, Run On!, Blue Mile, Boulder Running Company, Roncker’s Running Spot, Running Fit and VA Runner banners. More information is available at www.run.com or www.boulderrunningcompany.com.


Forward-Looking Statements

This news release includes statements that are or may be considered “forward-looking” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally can be identified by the use of words or phrases such as “believe,” “expect,” “future,” “anticipate,” “intend,” “plan,” “foresee,” “may,” “should,” “will,” “estimates,” “outlook,” “potential,” “optimistic,” “confidence,” “continue,” “evolve,” “expand,” “growth” or words and phrases of similar meaning. Statements that describe objectives, plans or goals also are forward-looking statements.

All of these forward-looking statements are subject to risks, management assumptions and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statements. The principal risk factors that could cause actual performance and future actions to differ materially from the forward-looking statements include, but are not limited to, the company’s reliance on a few key vendors for a majority of its merchandise purchases (including a significant portion from one key vendor); the availability and timely receipt of products; the ability to timely fulfill and ship products to customers; fluctuations in oil prices causing changes in gasoline and energy prices, resulting in changes in consumer spending as well as increases in utility, freight and product costs; product demand and market acceptance risks; deterioration of macro-economic and business conditions; the inability to locate and obtain or retain acceptable lease terms for the company’s stores; the effect of competitive products and pricing; loss of key employees; execution of strategic growth initiatives (including actual and potential mergers and acquisitions and other components of the company’s capital allocation strategy); cybersecurity risks, including breach of customer data; and the other risks detailed in the company’s Securities and Exchange Commission filings. Readers are urged to consider these factors carefully in evaluating the forward-looking statements. The forward-looking statements included herein are made only as of the date of this report and Finish Line undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.

3



 
 
The Finish Line, Inc.
Consolidated Statements of Income (Unaudited)
(In thousands, except per share and store/shop data)
 
 
Thirteen Weeks Ended
 
Twenty-Six Weeks Ended
 
 
August 30,
2014
 
August 31,
2013
 
August 30,
2014
 
August 31,
2013
 
 
 
 
 
 
 
 
 
Net sales
 
$
466,880

 
$
436,030

 
$
873,411

 
$
787,083

Cost of sales (including occupancy costs)
 
311,760

 
289,693

 
589,411

 
533,751

Gross profit
 
155,120

 
146,337

 
284,000

 
253,332

Selling, general and administrative expenses
 
111,882

 
103,455

 
220,778

 
202,811

Store closing costs
 
115

 
17

 
361

 
203

Impairment charges
 
264

 
—

 
2,332

 
—

Operating income
 
42,859

 
42,865

 
60,529

 
50,318

Interest (expense) income, net
 
(1
)
 
10

 
6

 
24

Income before income taxes
 
42,858

 
42,875

 
60,535

 
50,342

Income tax expense
 
16,699

 
16,682

 
23,721

 
19,635

Net income
 
26,159

 
26,193

 
36,814

 
30,707

Net (income) loss attributable to redeemable noncontrolling interest
 
(2
)
 
314

 
1,778

 
875

Net income attributable to The Finish Line, Inc.
 
$
26,157

 
$
26,507

 
$
38,592

 
$
31,582

Diluted earnings per share attributable to The Finish Line, Inc. shareholders
$
0.54

 
$
0.54

 
$
0.79

 
$
0.64

Diluted weighted average shares
 
48,202

 
48,757

 
48,281

 
48,744

Dividends declared per share
 
$
0.08

 
$
0.07

 
$
0.16

 
$
0.14

 
 
 
 
 
 
 
 
 
Finish Line store activity for the period:
 
 
 
 
 
 
 
 
     Beginning of period
 
645

 
651

 
645

 
645

       Opened
 
4

 
9

 
7

 
19

       Closed
 
(2
)
 
(1
)
 
(5
)
 
(5
)
     End of period
 
647

 
659

 
647

 
659

     Square feet at end of period
 
 
 
 
 
3,523,755

 
3,571,267

     Average square feet per store
 

 

 
5,446

 
5,419

Branded shops within department stores activity for the period:
 
 
 
 
 
 
 
 
     Beginning of period
 
262

 
44

 
185

 
3

       Opened
 
109

 
89

 
186

 
130

       Closed
 
(1
)
 
—

 
(1
)
 
—

     End of period
 
370

 
133

 
370

 
133

     Square feet at end of period
 
 
 
 
 
372,672

 
158,948

     Average square feet per shop
 

 

 
1,007

 
1,195

Running Specialty store activity for the period:
 
 
 
 
 
 
 
 
     Beginning of period
 
58

 
38

 
48

 
27

       Acquired
 
—

 
—

 
8

 
9

       Opened
 
—

 
1

 
2

 
3

       Closed
 
—

 
—

 
—

 
—

     End of period
 
58

 
39

 
58

 
39

     Square feet at end of period
 
 
 
 
 
199,905

 
119,964

     Average square feet per store
 

 

 
3,447

 
3,076

  

4


 
 
Thirteen Weeks Ended
 
Twenty-Six Weeks Ended
 
 
August 30,
2014
 
August 31,
2013
 
August 30,
2014
 
August 31,
2013
Net sales
 
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
Cost of sales (including occupancy costs)
 
66.8

 
66.4

 
67.5

 
67.8

Gross profit
 
33.2

 
33.6

 
32.5

 
32.2

Selling, general and administrative expenses
 
24.0

 
23.8

 
25.3

 
25.8

Store closing costs
 
—

 
—

 
—

 
—

Impairment charges
 
—

 
—

 
0.3

 
—

Operating income
 
9.2

 
9.8

 
6.9

 
6.4

Interest (expense) income, net
 
—

 
—

 
—

 
—

Income before income taxes
 
9.2

 
9.8

 
6.9

 
6.4

Income tax expense
 
3.6

 
3.8

 
2.7

 
2.5

Net income
 
5.6

 
6.0

 
4.2

 
3.9

Net (income) loss attributable to redeemable noncontrolling interest
 
—

 
0.1

 
0.2

 
0.1

Net income attributable to The Finish Line, Inc.
 
5.6
%
 
6.1
%
 
4.4
%
 
4.0
%


 
 
Condensed Consolidated Balance Sheets
 
 
August 30,
2014
 
August 31,
2013
 
March 1,
2014
 
 
(Unaudited)
 
(Unaudited)
 
 
ASSETS
 
 
 
 
 
 
Cash and cash equivalents
 
$
190,583

 
$
203,832

 
$
229,079

Merchandise inventories, net
 
329,924

 
295,952

 
304,209

Other current assets
 
27,104

 
23,852

 
33,675

Property and equipment, net
 
246,674

 
202,450

 
223,182

Goodwill
 
29,458

 
21,544

 
25,608

Other assets, net
 
9,013

 
19,932

 
9,192

     Total assets
 
$
832,756

 
$
767,562

 
$
824,945

LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
 
 
Current liabilities
 
$
186,282

 
$
172,122

 
$
193,670

Deferred credits from landlords
 
29,856

 
28,544

 
27,658

Other long-term liabilities
 
21,273

 
17,131

 
19,659

Redeemable noncontrolling interest, net
 
563

 
2,772

 
1,774

Shareholders’ equity
 
594,782

 
546,993

 
582,184

     Total liabilities and shareholders’ equity
 
$
832,756

 
$
767,562

 
$
824,945





5



The Finish Line, Inc.
Reconciliation of Gross Profit, GAAP to Gross Profit, Non-GAAP (unaudited)
(In thousands)

 
 
Thirteen Weeks Ended
 
Twenty-Six Weeks Ended
 
 
August 30, 2014
 
August 31, 2013
 
August 30, 2014
 
August 31, 2013
Gross profit, GAAP
 
$
155,120

 
33.2
%
 
$
146,337

 
33.6
%
 
$
284,000

 
32.5
%
 
$
253,332

 
32.2
%
   Start-up costs
 
—

 
—

 
—

 
—

 
—

 
—

 
5,758

 
0.7

Gross profit, Non-GAAP
 
$
155,120

 
33.2
%
 
$
146,337

 
33.6
%
 
$
284,000

 
32.5
%
 
$
259,090

 
32.9
%


 
Reconciliation of Selling, General and Administrative Expenses, GAAP to
Selling, General and Administrative Expenses, Non-GAAP (unaudited)
(In thousands)

 
 
Thirteen Weeks Ended
 
Twenty-Six Weeks Ended
 
 
August 30, 2014
 
August 31, 2013
 
August 30, 2014
 
August 31, 2013
Selling, general and administrative expenses, GAAP
 
$
111,882

 
24.0
%
 
$
103,455

 
23.8
%
 
$
220,778

 
25.3
%
 
$
202,811

 
25.8
 %
Start-up costs
 
—

 
—

 
—

 
—

 
—

 
—

 
(2,202
)
 
(0.3
)
Selling, general and administrative expenses, Non-GAAP
 
$
111,882

 
24.0
%
 
$
103,455

 
23.8
%
 
$
220,778

 
25.3
%
 
$
200,609

 
25.5
 %
 

 
Reconciliation of Operating Income, GAAP to Operating Income, Non-GAAP (unaudited)
(In thousands)

 
 
Thirteen Weeks Ended
 
Twenty-Six Weeks Ended
 
 
August 30, 2014
 
August 31, 2013
 
August 30, 2014
 
August 31, 2013
Operating income, GAAP
 
$
42,859

 
9.2
%
 
$
42,865

 
9.8
%
 
$
60,529

 
6.9
%
 
$
50,318

 
6.4
%
Impairment charges
 
264

 
—

 
—

 
—

 
2,332

 
0.3

 
—

 
—

Start-up costs
 
—

 
—

 
—

 
—

 
—

 
—

 
7,960

 
1.0

Operating income, Non-GAAP
 
$
43,123

 
9.2
%
 
$
42,865

 
9.8
%
 
$
62,861

 
7.2
%
 
$
58,278

 
7.4
%


 

6



Reconciliation of Net Income Attributable to The Finish Line, Inc., GAAP to
Net Income Attributable to The Finish Line, Inc., Non-GAAP (unaudited)
(In thousands)

 
 
Thirteen Weeks Ended
 
Twenty-Six Weeks Ended
 
 
August 30, 2014
 
August 31, 2013
 
August 30, 2014
 
August 31, 2013
Net income attributable to The Finish Line, Inc., GAAP
 
$
26,157

 
5.6
%
 
$
26,507

 
6.1
%
 
$
38,592

 
4.4
 %
 
$
31,582

 
4.0
 %
Impairment charges*
 
264

 
—

 
—

 
—

 
2,241

 
0.3

 
—

 
—

Start-up costs
 
—

 
—

 
—

 
—

 
—

 
—

 
7,960

 
1.0

Decrease in income tax expense
 
(102
)
 
—

 
—

 
—

 
(863
)
 
(0.1
)
 
(3,109
)
 
(0.4
)
Net income attributable to The Finish Line, Inc., Non-GAAP
 
$
26,319

 
5.6
%
 
$
26,507

 
6.1
%
 
$
39,970

 
4.6
 %
 
$
36,433

 
4.6
 %

* Net of decrease to net loss attributable to redeemable noncontrolling interest for the twenty-six weeks ended August 30, 2014 related to impairment charges of $91.


 
Reconciliation of Diluted Earnings Per Share Attributable to The Finish Line, Inc. Shareholders, GAAP to
Diluted Earnings Per Share Attributable to The Finish Line, Inc. Shareholders, Non-GAAP (unaudited)


 
 
Thirteen Weeks Ended
 
Twenty-Six Weeks Ended
 
 
August 30, 2014
 
August 31, 2013
 
August 30, 2014
 
August 31, 2013
Diluted earnings per share attributable to The Finish Line, Inc. shareholders, GAAP
 
$
0.54

 
$
0.54

 
$
0.79

 
$
0.64

Impairment charges, net of income taxes and redeemable noncontrolling interest
 
—

 
—

 
0.03

 
—

Start-up costs, net of income taxes
 
—

 
—

 
—

 
0.10

Diluted earnings per share attributable to The Finish Line, Inc. shareholders, Non-GAAP
 
$
0.54

 
$
0.54

 
$
0.82

 
$
0.74

 
Note: See Disclosure Regarding Non-GAAP Measures above.
 

Media Contact:
Investor Contact:
Dianna Boyce
Ed Wilhelm
Corporate Communications
Chief Financial Officer
317-613-6577
317-613-6914


7