SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the thirteen week period ended November 29, 2003 |
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the transition period from to |
Commission File number 0-20184
The Finish Line, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 35-1537210 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer identification number) |
| 3308 North Mitthoeffer Road Indianapolis, Indiana |
46235 | |
| (Address of principal executive offices) | (zip code) |
317-899-1022
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨
Shares of common stock outstanding at December 26, 2003:
| Class A | 20,757,176 | |||||
| Class B | 2,950,284 |
PART 1. FINANCIAL INFORMATION
| ITEM 1. | FINANCIAL STATEMENTS |
THE FINISH LINE, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
| November 29, 2003 |
November 30, 2002 |
March 1, 2003 | |||||||
| (unaudited) | (unaudited) | ||||||||
| ASSETS |
|||||||||
| CURRENT ASSETS: |
|||||||||
| Cash and cash equivalents |
$ | 51,494 | $ | 36,977 | $ | 73,399 | |||
| Marketable securities |
— | 745 | 506 | ||||||
| Accounts receivable |
12,129 | 9,035 | 5,854 | ||||||
| Merchandise inventories |
229,988 | 180,856 | 158,780 | ||||||
| Income taxes recoverable |
2,929 | 6,395 | — | ||||||
| Other |
4,904 | 11,753 | 8,693 | ||||||
| Total current assets |
301,444 | 245,761 | 247,232 | ||||||
| PROPERTY AND EQUIPMENT: |
|||||||||
| Land |
315 | 315 | 315 | ||||||
| Building |
11,676 | 8,730 | 8,730 | ||||||
| Leasehold improvements |
121,458 | 106,881 | 106,409 | ||||||
| Furniture, fixtures, and equipment |
59,076 | 53,425 | 54,019 | ||||||
| Construction in progress |
15,516 | 1,242 | 4,526 | ||||||
| 208,041 | 170,593 | 173,999 | |||||||
| Less accumulated depreciation |
89,018 | 75,847 | 79,037 | ||||||
| 119,023 | 94,746 | 94,962 | |||||||
| OTHER ASSETS: |
|||||||||
| Deferred income taxes |
5,099 | 6,916 | 7,884 | ||||||
| Total assets |
$ | 425,566 | $ | 347,423 | $ | 350,078 | |||
See accompanying notes.
2
THE FINISH LINE, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
| November 29, 2003 |
November 30, 2002 |
March 1, 2003 |
||||||||||
| (unaudited) | (unaudited) | |||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||||||
| CURRENT LIABILITIES: |
||||||||||||
| Accounts payable |
$ | 88,687 | $ | 72,419 | $ | 54,770 | ||||||
| Employee compensation |
7,590 | 7,456 | 8,287 | |||||||||
| Accrued property and sales tax |
5,021 | 3,755 | 4,841 | |||||||||
| Deferred income taxes |
9,511 | 4,785 | 5,800 | |||||||||
| Other liabilities and accrued expenses |
10,171 | 6,354 | 7,979 | |||||||||
| Total current liabilities |
120,980 | 94,769 | 81,677 | |||||||||
| Long-term deferred rent payments |
9,026 | 8,874 | 8,900 | |||||||||
| STOCKHOLDERS’ EQUITY: |
||||||||||||
| Preferred stock, $.01 par value; 1,000 shares authorized; none issued |
— | — | — | |||||||||
| Common stock, $.01 par value |
||||||||||||
| Class A: |
||||||||||||
| Shares authorized—30,000 |
||||||||||||
| Shares issued—(November 29, 2003—23,445; November 30, 2002—22,048; March 1, 2003—22,048) |
||||||||||||
| Shares outstanding—(November 29, 2003—20,739; November 30, 2002—18,684; March 1, 2003—18,695) |
234 | 220 | 220 | |||||||||
| Class B: |
||||||||||||
| Shares authorized—12,000 |
||||||||||||
| Shares issued and outstanding—(November 29, 2003—2,950 ; November 30, 2002—4,348; March 1, 2003—4,348) |
30 | 44 | 44 | |||||||||
| Additional paid-in capital |
128,397 | 124,142 | 124,347 | |||||||||
| Retained earnings |
187,963 | 146,327 | 161,742 | |||||||||
| Accumulated other comprehensive income |
(1 | ) | 6 | 2 | ||||||||
| Treasury stock—(November 29, 2003—2,706; November 30, 2002—3,364; March 1, 2003—3,353) |
(21,063 | ) | (26,959 | ) | (26,854 | ) | ||||||
| Total stockholders’ equity |
295,560 | 243,780 | 259,501 | |||||||||
| Total liabilities and stockholders’ equity |
$ | 425,566 | $ | 347,423 | $ | 350,078 | ||||||
See accompanying notes.
3
THE FINISH LINE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
| Thirteen Weeks Ended |
Thirty–Nine Weeks Ended |
|||||||||||||||
| November 29, 2003 |
November 30, 2002 |
November 29, 2003 |
November 30, 2002 |
|||||||||||||
| Net sales |
$ | 202,035 | $ | 147,877 | $ | 680,629 | $ | 522,733 | ||||||||
| Cost of sales (including occupancy expenses) |
147,976 | 112,271 | 479,449 | 377,903 | ||||||||||||
| Gross profit |
54,059 | 35,606 | 201,180 | 144,830 | ||||||||||||
| Selling, general, and administrative expenses |
51,960 | 40,752 | 160,588 | 131,356 | ||||||||||||
| Repositioning charge reversal |
— | — | — | (1,126 | ) | |||||||||||
| Insurance income—tornado |
(1,228 | ) | — | (1,228 | ) | — | ||||||||||
| Operating income (loss) |
3,327 | (5,146 | ) | 41,820 | 14,600 | |||||||||||
| Interest income—net |
143 | 137 | 473 | 674 | ||||||||||||
| Income (loss) before income taxes |
3,470 | (5,009 | ) | 42,293 | 15,274 | |||||||||||
| Provision (benefit) for income taxes |
1,319 | (1,853 | ) | 16,072 | 5,652 | |||||||||||
| Net income (loss) |
$ | 2,151 | $ | (3,156 | ) | $ | 26,221 | $ | 9,622 | |||||||
| Basic net income (loss) per share |
$ | .09 | $ | (.13 | ) | $ | 1.12 | $ | .40 | |||||||
| Basic weighted average shares |
23,595 | 23,443 | 23,346 | 24,110 | ||||||||||||
| Diluted net income (loss) per share |
$ | .09 | $ | (.13 | ) | $ | 1.09 | $ | .39 | |||||||
| Diluted weighted average shares |
24,313 | 23,659 | 24,009 | 24,514 | ||||||||||||
See accompanying notes.
4
THE FINISH LINE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands) (Unaudited)
| Thirty-Nine Weeks Ended |
||||||||
| November 29, 2003 |
November 30, 2002 |
|||||||
| OPERATING ACTIVITIES: |
||||||||
| Net income |
$ | 26,221 | $ | 9,622 | ||||
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
||||||||
| Depreciation and amortization |
13,521 | 12,812 | ||||||
| Repositioning charge reversal |
— | (1,126 | ) | |||||
| Deferred income taxes |
6,496 | 2,931 | ||||||
| Loss on destruction of property and equipment in a tornado |
— | 1,960 | ||||||
| Loss on disposal of property and equipment |
84 | 536 | ||||||
| Changes in operating assets and liabilities: |
||||||||
| Accounts receivable |
(6,275 | ) | (6,814 | ) | ||||
| Merchandise inventories |
(71,208 | ) | (38,978 | ) | ||||
| Other current assets |
3,789 | (4,080 | ) | |||||
| Accounts payable |
33,917 | 21,511 | ||||||
| Employee compensation |
(697 | ) | (312 | ) | ||||
| Accrued income taxes recoverable/payable |
2,092 | (6,395 | ) | |||||
| Other liabilities and accrued expenses |
(2,649 | ) | (2,946 | ) | ||||
| Deferred rent payments |
126 | 260 | ||||||
| Net cash provided by (used in) operating activities |
5,417 | (11,019 | ) | |||||
| INVESTING ACTIVITIES: |
||||||||
| Purchases of property and equipment |
(37,693 | ) | (19,447 | |||||