|
|
|
|
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Indiana
|
|
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)
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Large accelerated filer
|
|
x
|
|
Accelerated filer
|
|
¨
|
Non-accelerated filer
|
|
¨
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
|
|
¨
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Emerging growth company
|
|
¨
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|
|
Item 1.
|
Financial Statements
|
|
|
August 26,
2017 |
|
August 27,
2016 |
|
February 25,
2017 |
||||||
|
|
(unaudited)
|
|
(unaudited)
|
|
|
||||||
ASSETS
|
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
|
$
|
114,918
|
|
|
$
|
114,301
|
|
|
$
|
90,856
|
|
Accounts receivable, net
|
|
14,629
|
|
|
19,225
|
|
|
20,470
|
|
|||
Merchandise inventories, net
|
|
308,074
|
|
|
346,385
|
|
|
331,146
|
|
|||
Income taxes receivable
|
|
16,461
|
|
|
—
|
|
|
35,559
|
|
|||
Other current assets
|
|
14,955
|
|
|
15,747
|
|
|
13,379
|
|
|||
Current assets held for sale
|
|
—
|
|
|
27,160
|
|
|
—
|
|
|||
Total current assets
|
|
469,037
|
|
|
522,818
|
|
|
491,410
|
|
|||
Property and equipment:
|
|
|
|
|
|
|
||||||
Land
|
|
1,557
|
|
|
1,557
|
|
|
1,557
|
|
|||
Building
|
|
44,480
|
|
|
43,825
|
|
|
44,249
|
|
|||
Leasehold improvements
|
|
208,044
|
|
|
207,150
|
|
|
206,446
|
|
|||
Furniture, fixtures, and equipment
|
|
147,411
|
|
|
141,934
|
|
|
143,576
|
|
|||
Construction in progress
|
|
2,726
|
|
|
1,872
|
|
|
5,966
|
|
|||
|
|
404,218
|
|
|
396,338
|
|
|
401,794
|
|
|||
Less accumulated depreciation
|
|
250,871
|
|
|
242,885
|
|
|
244,200
|
|
|||
Total property and equipment, net
|
|
153,347
|
|
|
153,453
|
|
|
157,594
|
|
|||
Intangible assets, net
|
|
86,215
|
|
|
92,542
|
|
|
90,303
|
|
|||
Other assets, net
|
|
5,440
|
|
|
7,579
|
|
|
7,161
|
|
|||
Long-term assets held for sale
|
|
—
|
|
|
48,929
|
|
|
—
|
|
|||
Total assets
|
|
$
|
714,039
|
|
|
$
|
825,321
|
|
|
$
|
746,468
|
|
|
|
August 26,
2017 |
|
August 27,
2016 |
|
February 25,
2017 |
||||||
|
|
(unaudited)
|
|
(unaudited)
|
|
|
||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
||||||
Current liabilities:
|
|
|
|
|
|
|
||||||
Accounts payable
|
|
$
|
147,141
|
|
|
$
|
168,814
|
|
|
$
|
166,614
|
|
Employee compensation
|
|
13,498
|
|
|
13,690
|
|
|
15,407
|
|
|||
Accrued property and sales tax
|
|
9,163
|
|
|
9,997
|
|
|
9,750
|
|
|||
Income taxes payable
|
|
—
|
|
|
8,497
|
|
|
—
|
|
|||
Other liabilities and accrued expenses
|
|
25,439
|
|
|
30,381
|
|
|
30,200
|
|
|||
Current liabilities held for sale
|
|
—
|
|
|
14,191
|
|
|
—
|
|
|||
Total current liabilities
|
|
195,241
|
|
|
245,570
|
|
|
221,971
|
|
|||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|||
Deferred credits from landlords
|
|
34,255
|
|
|
32,021
|
|
|
32,133
|
|
|||
Deferred income taxes
|
|
23,805
|
|
|
21,265
|
|
|
32,226
|
|
|||
Other long-term liabilities
|
|
7,114
|
|
|
9,252
|
|
|
8,640
|
|
|||
Long-term liabilities held for sale
|
|
—
|
|
|
2,019
|
|
|
—
|
|
|||
Shareholders’ equity:
|
|
|
|
|
|
|
||||||
Preferred stock, $.01 par value; 1,000 shares authorized; none issued
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Common stock, $.01 par value; 110,000 shares authorized; 60,145 shares issued
|
|
|
|
|
|
|
||||||
Shares outstanding - (August 26, 2017 – 40,235; August 27, 2016 – 40,562; February 25, 2017 – 40,337)
|
|
601
|
|
|
601
|
|
|
601
|
|
|||
Additional paid-in capital
|
|
247,642
|
|
|
242,039
|
|
|
245,335
|
|
|||
Retained earnings
|
|
606,158
|
|
|
662,639
|
|
|
604,136
|
|
|||
Treasury stock, shares held - (August 26, 2017 – 19,523; August 27, 2016 – 19,197; February 25, 2017 – 19,421)
|
|
(400,777
|
)
|
|
(390,085
|
)
|
|
(398,574
|
)
|
|||
Total shareholders’ equity
|
|
453,624
|
|
|
515,194
|
|
|
451,498
|
|
|||
Total liabilities and shareholders’ equity
|
|
$
|
714,039
|
|
|
$
|
825,321
|
|
|
$
|
746,468
|
|
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
||||||||||||
|
|
August 26, 2017
|
|
August 27, 2016
|
|
August 26, 2017
|
|
August 27, 2016
|
||||||||
Net sales
|
|
$
|
469,352
|
|
|
$
|
485,156
|
|
|
$
|
899,124
|
|
|
$
|
915,200
|
|
Cost of sales (including occupancy costs)
|
|
339,020
|
|
|
331,447
|
|
|
641,365
|
|
|
628,314
|
|
||||
Gross profit
|
|
130,332
|
|
|
153,709
|
|
|
257,759
|
|
|
286,886
|
|
||||
Selling, general, and administrative expenses
|
|
121,772
|
|
|
116,511
|
|
|
234,184
|
|
|
234,060
|
|
||||
Impairment charges and store closing costs
|
|
2,335
|
|
|
182
|
|
|
4,493
|
|
|
182
|
|
||||
Operating income
|
|
6,225
|
|
|
37,016
|
|
|
19,082
|
|
|
52,644
|
|
||||
Interest income (expense), net
|
|
10
|
|
|
(32
|
)
|
|
10
|
|
|
(26
|
)
|
||||
Income from continuing operations before income taxes
|
|
6,235
|
|
|
36,984
|
|
|
19,092
|
|
|
52,618
|
|
||||
Income tax expense
|
|
2,888
|
|
|
13,627
|
|
|
7,748
|
|
|
19,173
|
|
||||
Net income from continuing operations
|
|
3,347
|
|
|
23,357
|
|
|
11,344
|
|
|
33,445
|
|
||||
Net loss from discontinued operations, net of tax
|
|
(504
|
)
|
|
(1,282
|
)
|
|
(361
|
)
|
|
(1,744
|
)
|
||||
Net income
|
|
$
|
2,843
|
|
|
$
|
22,075
|
|
|
$
|
10,983
|
|
|
$
|
31,701
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
$
|
0.08
|
|
|
$
|
0.56
|
|
|
$
|
0.28
|
|
|
$
|
0.79
|
|
Discontinued operations
|
|
(0.01
|
)
|
|
(0.03
|
)
|
|
(0.01
|
)
|
|
(0.04
|
)
|
||||
Basic earnings per share
|
|
$
|
0.07
|
|
|
$
|
0.53
|
|
|
$
|
0.27
|
|
|
$
|
0.75
|
|
Basic weighted average shares
|
|
40,198
|
|
|
40,944
|
|
|
40,236
|
|
|
41,357
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
$
|
0.08
|
|
|
$
|
0.56
|
|
|
$
|
0.28
|
|
|
$
|
0.79
|
|
Discontinued operations
|
|
(0.01
|
)
|
|
(0.03
|
)
|
|
(0.01
|
)
|
|
(0.04
|
)
|
||||
Diluted earnings per share
|
|
$
|
0.07
|
|
|
$
|
0.53
|
|
|
$
|
0.27
|
|
|
$
|
0.75
|
|
Diluted weighted average shares
|
|
40,260
|
|
|
41,122
|
|
|
40,311
|
|
|
41,506
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Dividends declared per share
|
|
$
|
0.11
|
|
|
$
|
0.10
|
|
|
$
|
0.22
|
|
|
$
|
0.20
|
|
|
|
Twenty-Six Weeks Ended
|
||||||
|
|
August 26, 2017
|
|
August 27, 2016
|
||||
Operating activities:
|
|
|
||||||
Net income
|
|
$
|
10,983
|
|
|
$
|
31,701
|
|
Net loss from discontinued operations
|
|
(361
|
)
|
|
(1,744
|
)
|
||
Net income from continuing operations
|
|
11,344
|
|
|
33,445
|
|
||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
||||||
Impairment charges and store closing costs
|
|
4,493
|
|
|
182
|
|
||
Depreciation and amortization
|
|
26,822
|
|
|
23,023
|
|
||
Deferred income taxes
|
|
(8,370
|
)
|
|
(4,923
|
)
|
||
Gain on disposals of property and equipment
|
|
(20
|
)
|
|
(54
|
)
|
||
Share-based compensation
|
|
3,625
|
|
|
5,434
|
|
||
Changes in operating assets and liabilities:
|
|
|
||||||
Accounts receivable, net
|
|
5,841
|
|
|
(2,743
|
)
|
||
Merchandise inventories, net
|
|
23,072
|
|
|
1,581
|
|
||
Other assets
|
|
(1,110
|
)
|
|
1,511
|
|
||
Accounts payable
|
|
(14,519
|
)
|
|
22,972
|
|
||
Employee compensation
|
|
(1,580
|
)
|
|
(3,912
|
)
|
||
Income taxes receivable/payable
|
|
(14,615
|
)
|
|
38,861
|
|
||
Other liabilities and accrued expenses
|
|
(3,728
|
)
|
|
(1,117
|
)
|
||
Deferred credits from landlords
|
|
2,122
|
|
|
1,518
|
|
||
Net cash provided by operating activities - continuing operations
|
|
33,377
|
|
|
115,778
|
|
||
Net cash provided by operating activities - discontinued operations
|
|
31,961
|
|
|
3,577
|
|
||
Net cash provided by operating activities
|
|
65,338
|
|
|
119,355
|
|
||
Investing activities:
|
|
|
|
|
||||
Capital expenditures for property and equipment
|
|
(20,135
|
)
|
|
(27,366
|
)
|
||
Payments for intangible assets
|
|
(5,057
|
)
|
|
(7,301
|
)
|
||
Proceeds from disposals of property and equipment
|
|
16
|
|
|
380
|
|
||
Payments for sale of discontinued operations
|
|
(1,986
|
)
|
|
—
|
|
||
Net cash used in investing activities - continuing operations
|
|
(27,162
|
)
|
|
(34,287
|
)
|
||
Net cash used in investing activities - discontinued operations
|
|
—
|
|
|
(466
|
)
|
||
Net cash used in investing activities
|
|
(27,162
|
)
|
|
(34,753
|
)
|
||
Financing activities:
|
|
|
|
|
||||
Borrowings on revolving credit facility
|
|
—
|
|
|
30,000
|
|
||
Repayments on revolving credit facility
|
|
—
|
|
|
(30,000
|
)
|
||
Dividends paid to shareholders
|
|
(8,993
|
)
|
|
(8,512
|
)
|
||
Proceeds from issuance of common stock, net of settlement of tax withholding obligations
|
|
202
|
|
|
1,275
|
|
||
Purchases of treasury stock
|
|
(3,823
|
)
|
|
(42,559
|
)
|
||
Net cash used in financing activities - continuing operations
|
|
(12,614
|
)
|
|
(49,796
|
)
|
||
Net cash used in financing activities - discontinued operations
|
|
(1,500
|
)
|
|
—
|
|
||
Net cash used in financing activities
|
|
(14,114
|
)
|
|
(49,796
|
)
|
||
Net increase in cash and cash equivalents
|
|
24,062
|
|
|
34,806
|
|
||
Cash and cash equivalents at beginning of period
|
|
90,856
|
|
|
79,495
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
114,918
|
|
|
$
|
114,301
|
|
Supplemental disclosure of noncash operating and investing activities:
|
|
|
|
|
||||
Capital expenditures incurred but not yet paid as of August 26, 2017 and August 27, 2016
|
|
$
|
895
|
|
|
$
|
1,492
|
|
Capital expenditures incurred but not yet paid as of February 25, 2017 and February 27, 2016
|
|
$
|
3,111
|
|
|
$
|
5,700
|
|
|
|
Thirteen Weeks Ended
August 27, 2016 |
|
Twenty-Six Weeks Ended
August 27, 2016 |
||||
Net sales
|
|
$
|
24,247
|
|
|
$
|
47,718
|
|
Cost of sales (including occupancy costs)
|
|
18,482
|
|
|
35,319
|
|
||
Gross profit
|
|
5,765
|
|
|
12,399
|
|
||
Selling, general, and administrative expenses
|
|
7,713
|
|
|
15,063
|
|
||
Impairment charges and store closing costs
|
|
154
|
|
|
189
|
|
||
Loss from discontinued operations before income tax benefit
|
|
(2,102
|
)
|
|
(2,853
|
)
|
||
Income tax benefit
|
|
820
|
|
|
1,109
|
|
||
Net loss from discontinued operations, net of tax
|
|
$
|
(1,282
|
)
|
|
$
|
(1,744
|
)
|
ASSETS
|
|
|
||
Current assets:
|
|
|
||
Accounts receivable, net
|
|
$
|
1,062
|
|
Merchandise inventories, net
|
|
25,878
|
|
|
Other
|
|
220
|
|
|
Total current assets
|
|
27,160
|
|
|
Property and equipment, net
|
|
3,992
|
|
|
Goodwill
|
|
44,029
|
|
|
Other assets, net
|
|
908
|
|
|
Total assets
|
|
$
|
76,089
|
|
LIABILITIES
|
|
|
||
Current liabilities:
|
|
|
||
Accounts payable
|
|
$
|
10,224
|
|
Employee compensation
|
|
945
|
|
|
Accrued property and sales tax
|
|
625
|
|
|
Other liabilities and accrued expenses
|
|
2,397
|
|
|
Total current liabilities
|
|
14,191
|
|
|
Deferred credits from landlords
|
|
1,980
|
|
|
Other long-term liabilities
|
|
39
|
|
|
Total liabilities
|
|
$
|
16,210
|
|
Level 1:
|
|
Observable inputs such as quoted prices in active markets;
|
|
|
|
Level 2:
|
|
Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and
|
|
|
|
Level 3:
|
|
Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
|
|
|
August 26, 2017
|
|
August 27, 2016
|
|
February 25, 2017
|
||||||||||||||||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Non-qualified deferred compensation plan
|
|
$
|
4,262
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,503
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,517
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
||||||||||||
|
|
August 26, 2017
|
|
August 27, 2016
|
|
August 26, 2017
|
|
August 27, 2016
|
||||||||
Net income from continuing operations
|
|
$
|
3,347
|
|
|
$
|
23,357
|
|
|
$
|
11,344
|
|
|
$
|
33,445
|
|
Net income from continuing operations attributable to participating securities
|
|
65
|
|
|
444
|
|
|
209
|
|
|
609
|
|
||||
Net income from continuing operations available to shareholders
|
|
$
|
3,282
|
|
|
$
|
22,913
|
|
|
$
|
11,135
|
|
|
$
|
32,836
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net loss from discontinued operations
|
|
$
|
(504
|
)
|
|
$
|
(1,282
|
)
|
|
$
|
(361
|
)
|
|
$
|
(1,744
|
)
|
Net loss from discontinued operations attributable to participating securities
|
|
(9
|
)
|
|
(24
|
)
|
|
(6
|
)
|
|
(32
|
)
|
||||
Net loss from discontinued operations available to shareholders
|
|
$
|
(495
|
)
|
|
$
|
(1,258
|
)
|
|
$
|
(355
|
)
|
|
$
|
(1,712
|
)
|
Net income available to shareholders
|
|
$
|
2,787
|
|
|
$
|
21,655
|
|
|
$
|
10,780
|
|
|
$
|
31,124
|
|
Basic earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average number of common shares outstanding
|
|
40,198
|
|
|
40,944
|
|
|
40,236
|
|
|
41,357
|
|
||||
Basic earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Continued operations
|
|
$
|
0.08
|
|
|
$
|
0.56
|
|
|
$
|
0.28
|
|
|
$
|
0.79
|
|
Discontinued operations
|
|
(0.01
|
)
|
|
(0.03
|
)
|
|
(0.01
|
)
|
|
(0.04
|
)
|
||||
Basic earnings per share
|
|
$
|
0.07
|
|
|
0.53
|
|
|
0.27
|
|
|
$
|
0.75
|
|
||
Diluted earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average number of common shares outstanding
|
|
40,198
|
|
|
40,944
|
|
|
40,236
|
|
|
41,357
|
|
||||
Dilutive effect of potential common shares(a)
|
|
62
|
|
|
178
|
|
|
75
|
|
|
149
|
|
||||
Diluted weighted-average number of common shares outstanding
|
|
40,260
|
|
|
41,122
|
|
|
40,311
|
|
|
41,506
|
|
||||
Diluted earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Continued operations
|
|
$
|
0.08
|
|
|
$
|
0.56
|
|
|
$
|
0.28
|
|
|
$
|
0.79
|
|
Discontinued operations
|
|
(0.01
|
)
|
|
(0.03
|
)
|
|
(0.01
|
)
|
|
(0.04
|
)
|
||||
Diluted earnings per share
|
|
$
|
0.07
|
|
|
$
|
0.53
|
|
|
$
|
0.27
|
|
|
$
|
0.75
|
|
(a)
|
The computation of diluted earnings per share attributable to The Finish Line, Inc. shareholders excludes options to purchase approximately
3.4 million
and
3.1 million
shares of common stock in the
thirteen weeks ended
August 26, 2017
and
August 27, 2016
, respectively, and
3.4 million
and
3.0 million
shares of common stock in the
twenty-six weeks ended
August 26, 2017
and
August 27, 2016
, respectively, because the impact of such options would have been anti-dilutive.
|
Item 2.
|
Management
’
s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
||||||||
Number of stores/shops
|
|
August 26, 2017
|
|
August 27, 2016
|
|
August 26, 2017
|
|
August 27, 2016
|
||||
Finish Line:
|
|
|
|
|
|
|
|
|
||||
Beginning of period
|
|
571
|
|
|
586
|
|
|
573
|
|
|
591
|
|
Opened
|
|
—
|
|
|
4
|
|
|
—
|
|
|
5
|
|
Closed
|
|
(2
|
)
|
|
(5
|
)
|
|
(4
|
)
|
|
(11
|
)
|
End of period
|
|
569
|
|
|
585
|
|
|
569
|
|
|
585
|
|
Branded shops within department stores:
|
|
|
|
|
|
|
|
|
||||
Beginning of period
|
|
375
|
|
|
392
|
|
|
374
|
|
|
392
|
|
Opened
|
|
3
|
|
|
—
|
|
|
4
|
|
|
—
|
|
Closed
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
End of period
|
|
378
|
|
|
391
|
|
|
378
|
|
|
391
|
|
Total:
|
|
|
|
|
|
|
|
|
||||
Beginning of period
|
|
946
|
|
|
978
|
|
|
947
|
|
|
983
|
|
Opened
|
|
3
|
|
|
4
|
|
|
4
|
|
|
5
|
|
Closed
|
|
(2
|
)
|
|
(6
|
)
|
|
(4
|
)
|
|
(12
|
)
|
End of period
|
|
947
|
|
|
976
|
|
|
947
|
|
|
976
|
|
Square feet information
|
|
August 26, 2017
|
|
August 27, 2016
|
||
Finish Line:
|
|
|
|
|
||
Square feet
|
|
3,175,989
|
|
|
3,249,455
|
|
Average store size
|
|
5,582
|
|
|
5,555
|
|
Branded shops within department stores:
|
|
|
|
|
||
Square feet
|
|
533,219
|
|
|
509,880
|
|
Average shop size
|
|
1,411
|
|
|
1,304
|
|
Total:
|
|
|
|
|
||
Square feet
|
|
3,709,208
|
|
|
3,759,335
|
|
|
|
Thirteen Weeks Ended
|
||||||||||||
Category
|
|
August 26, 2017
|
|
August 27, 2016
|
||||||||||
Footwear
|
|
$
|
438,878
|
|
|
94
|
%
|
|
$
|
451,271
|
|
|
93
|
%
|
Softgoods
|
|
30,474
|
|
|
6
|
%
|
|
33,885
|
|
|
7
|
%
|
||
Total net sales
|
|
$
|
469,352
|
|
|
100
|
%
|
|
$
|
485,156
|
|
|
100
|
%
|
|
|
Twenty-Six Weeks Ended
|
||||||||||||
Category
|
|
August 26, 2017
|
|
August 27, 2016
|
||||||||||
Footwear
|
|
$
|
844,430
|
|
|
94
|
%
|
|
$
|
853,170
|
|
|
93
|
%
|
Softgoods
|
|
54,694
|
|
|
6
|
%
|
|
62,030
|
|
|
7
|
%
|
||
Total net sales
|
|
$
|
899,124
|
|
|
100
|
%
|
|
$
|
915,200
|
|
|
100
|
%
|
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
||||||||
|
|
August 26, 2017
|
|
August 27, 2016
|
|
August 26, 2017
|
|
August 27, 2016
|
||||
Net sales
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of sales (including occupancy costs)
|
|
72.2
|
|
|
68.3
|
|
|
71.3
|
|
|
68.7
|
|
Gross profit
|
|
27.8
|
|
|
31.7
|
|
|
28.7
|
|
|
31.3
|
|
Selling, general, and administrative expenses
|
|
26.0
|
|
|
24.0
|
|
|
26.0
|
|
|
25.5
|
|
Impairment charges and store closing costs
|
|
0.5
|
|
|
0.1
|
|
|
0.6
|
|
|
—
|
|
Operating income
|
|
1.3
|
|
|
7.6
|
|
|
2.1
|
|
|
5.8
|
|
Interest income (expense), net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Income from continuing operations before income taxes
|
|
1.3
|
|
|
7.6
|
|
|
2.1
|
|
|
5.8
|
|
Income tax expense
|
|
0.6
|
|
|
2.8
|
|
|
0.8
|
|
|
2.1
|
|
Net income from continuing operations
|
|
0.7
|
|
|
4.8
|
|
|
1.3
|
|
|
3.7
|
|
Net loss from discontinued operations, net of tax
|
|
(0.1
|
)
|
|
(0.2
|
)
|
|
(0.1
|
)
|
|
(0.2
|
)
|
Net income
|
|
0.6
|
%
|
|
4.6
|
%
|
|
1.2
|
%
|
|
3.5
|
%
|
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
||||||||||||
|
|
August 26, 2017
|
|
August 27, 2016
|
|
August 26, 2017
|
|
August 27, 2016
|
||||||||
|
|
(dollars in thousands)
|
|
(dollars in thousands)
|
||||||||||||
Brick and mortar stores sales
|
|
$
|
311,065
|
|
|
$
|
332,289
|
|
|
$
|
587,751
|
|
|
$
|
621,339
|
|
Digital sales
|
|
76,624
|
|
|
75,505
|
|
|
146,655
|
|
|
143,418
|
|
||||
Shops within department stores sales
|
|
81,663
|
|
|
77,362
|
|
|
164,718
|
|
|
150,443
|
|
||||
Total net sales
|
|
$
|
469,352
|
|
|
$
|
485,156
|
|
|
$
|
899,124
|
|
|
$
|
915,200
|
|
|
|
|
|
|
|
|
|
|
||||||||
Brick and mortar comparable sales (decrease) increase
|
|
(5.9
|
)%
|
|
1.4
|
%
|
|
(4.2
|
)%
|
|
1.6
|
%
|
||||
Digital comparable sales increase
|
|
1.5
|
%
|
|
24.4
|
%
|
|
2.3
|
%
|
|
11.7
|
%
|
||||
Finish Line comparable sales (decrease) increase
|
|
(4.5
|
)%
|
|
5.1
|
%
|
|
(2.9
|
)%
|
|
3.4
|
%
|
||||
Shops within department stores comparable sales increase
|
|
6.8
|
%
|
|
31.1
|
%
|
|
11.3
|
%
|
|
28.7
|
%
|
•
|
A decrease in Finish Line net sales (composed of brick and mortar net sales and digital net sales) of 4.9% primarily due to a
decrease
of
4.5%
in Finish Line comparable stores, as well as a decrease in net Finish Line store count for the
thirteen weeks ended
August 26, 2017
as compared to the
thirteen weeks ended
August 27, 2016
; and
|
•
|
An
increase
in shops within department stores net sales of
5.6%
, primarily due to an increase in comparable sales, partially offset by a decrease in non-branded shop net sales.
|
•
|
A decrease in Finish Line net sales (composed of brick and mortar net sales and digital net sales) of 4.0% primarily due to a
decrease
of
2.9%
in Finish Line comparable sales, as well as a decrease in net Finish Line store count for the
twenty-six weeks ended
August 26, 2017
as compared to the
twenty-six weeks ended
August 27, 2016
; and
|
•
|
An
increase
in shops within department stores net sales of
9.5%
, primarily due to an increase in comparable sales, partially offset by a decrease in non-branded shop net sales.
|
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
||||||||||||
|
|
August 26, 2017
|
|
August 27, 2016
|
|
August 26, 2017
|
|
August 27, 2016
|
||||||||
|
|
(dollars in thousands)
|
|
(dollars in thousands)
|
||||||||||||
Cost of sales (including occupancy costs)
|
|
$
|
339,020
|
|
|
$
|
331,447
|
|
|
$
|
641,365
|
|
|
$
|
628,314
|
|
Gross profit
|
|
$
|
130,332
|
|
|
$
|
153,709
|
|
|
$
|
257,759
|
|
|
$
|
286,886
|
|
Gross profit as a percentage of net sales
|
|
27.8
|
%
|
|
31.7
|
%
|
|
28.7
|
%
|
|
31.3
|
%
|
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
||||||||||||
|
|
August 26, 2017
|
|
August 27, 2016
|
|
August 26, 2017
|
|
August 27, 2016
|
||||||||
|
|
(dollars in thousands)
|
|
(dollars in thousands)
|
||||||||||||
Selling, general, and administrative expenses
|
|
$
|
121,772
|
|
|
$
|
116,511
|
|
|
$
|
234,184
|
|
|
$
|
234,060
|
|
Selling, general, and administrative expenses as a percentage of net sales
|
|
26.0
|
%
|
|
24.0
|
%
|
|
26.0
|
%
|
|
25.5
|
%
|
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
||||||||||||
|
|
August 26, 2017
|
|
August 27, 2016
|
|
August 26, 2017
|
|
August 27, 2016
|
||||||||
|
|
(dollars in thousands)
|
|
(dollars in thousands)
|
||||||||||||
Impairment charges and store closing costs
|
|
$
|
2,335
|
|
|
$
|
182
|
|
|
$
|
4,493
|
|
|
$
|
182
|
|
Impairment charges and store closing costs as a percentage of net sales
|
|
0.5
|
%
|
|
0.1
|
%
|
|
0.6
|
%
|
|
—
|
%
|
||||
Number of stores/shops closed
|
|
2
|
|
|
6
|
|
|
4
|
|
|
12
|
|
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
||||||||||||
|
|
August 26, 2017
|
|
August 27, 2016
|
|
August 26, 2017
|
|
August 27, 2016
|
||||||||
|
|
(dollars in thousands)
|
|
(dollars in thousands)
|
||||||||||||
Interest income (expense), net
|
|
$
|
10
|
|
|
$
|
(32
|
)
|
|
$
|
10
|
|
|
$
|
(26
|
)
|
Interest income (expense), net as a percentage of net sales
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
||||||||||||
|
|
August 26, 2017
|
|
August 27, 2016
|
|
August 26, 2017
|
|
August 27, 2016
|
||||||||
|
|
(dollars in thousands)
|
|
(dollars in thousands)
|
||||||||||||
Income tax expense
|
|
$
|
2,888
|
|
|
$
|
13,627
|
|
|
$
|
7,748
|
|
|
$
|
19,173
|
|
Income tax expense as a percentage of net sales
|
|
0.6
|
%
|
|
2.8
|
%
|
|
0.8
|
%
|
|
2.1
|
%
|
||||
Effective income tax rate
|
|
46.3
|
%
|
|
36.8
|
%
|
|
40.6
|
%
|
|
36.4
|
%
|
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
||||||||||||
|
|
August 26, 2017
|
|
August 27, 2016
|
|
August 26, 2017
|
|
August 27, 2016
|
||||||||
|
|
(dollars in thousands)
|
|
(dollars in thousands)
|
||||||||||||
Net income from continuing operations
|
|
$
|
3,347
|
|
|
$
|
23,357
|
|
|
$
|
11,344
|
|
|
$
|
33,445
|
|
Net income from continuing operations as a percentage of net sales
|
|
0.7
|
%
|
|
4.8
|
%
|
|
1.3
|
%
|
|
3.7
|
%
|
||||
Diluted earnings per share
|
|
$
|
0.08
|
|
|
$
|
0.56
|
|
|
$
|
0.28
|
|
|
$
|
0.79
|
|
|
|
Thirteen Weeks Ended
|
|
Twenty-Six Weeks Ended
|
||||||||||||
|
|
August 26, 2017
|
|
August 27, 2016
|
|
August 26, 2017
|
|
August 27, 2016
|
||||||||
|
|
(dollars in thousands)
|
|
(dollars in thousands)
|
||||||||||||
Net loss from discontinued operations, net of tax
|
|
$
|
(504
|
)
|
|
$
|
(1,282
|
)
|
|
$
|
(361
|
)
|
|
$
|
(1,744
|
)
|
Net loss from discontinued operations as a percentage of net sales
|
|
(0.1
|
)%
|
|
(0.2
|
)%
|
|
(0.1
|
)%
|
|
(0.2
|
)%
|
||||
Diluted loss per share from discontinued operations
|
|
$
|
(0.01
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.04
|
)
|
|
|
Thirteen Weeks Ended
August 27, 2016 |
|
Twenty-Six Weeks Ended
August 27, 2016 |
||||
Net sales
|
|
$
|
24,247
|
|
|
$
|
47,718
|
|
Cost of sales (including occupancy costs)
|
|
18,482
|
|
|
35,319
|
|
||
Gross profit
|
|
5,765
|
|
|
12,399
|
|
||
Selling, general, and administrative expenses
|
|
7,713
|
|
|
15,063
|
|
||
Impairment charges and store closing costs
|
|
154
|
|
|
189
|
|
||
Loss from discontinued operations before income tax benefit
|
|
(2,102
|
)
|
|
(2,853
|
)
|
||
Income tax benefit
|
|
820
|
|
|
1,109
|
|
||
Net loss from discontinued operations, net of tax
|
|
$
|
(1,282
|
)
|
|
$
|
(1,744
|
)
|
|
|
August 26, 2017
|
|
August 27, 2016
|
|
February 25, 2017
|
||||||
Cash and cash equivalents
|
|
$
|
114,918
|
|
|
$
|
114,301
|
|
|
$
|
90,856
|
|
Merchandise inventories, net
|
|
$
|
308,074
|
|
|
$
|
346,385
|
|
|
$
|
331,146
|
|
Interest-bearing debt
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Working capital
|
|
$
|
273,796
|
|
|
$
|
277,248
|
|
|
$
|
269,439
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risks
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
|
Total Number of
Shares Purchased |
|
Average Price
Paid per Share(1) |
|
Total Number of
Shares Purchased as Part of Publicly Announced Plans or Programs |
|
Maximum Number (or
Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Program |
|||||
May 28, 2017 – July 1, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
4,541,936
|
|
July 2, 2017 – July 29, 2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,541,936
|
|
|
July 30, 2017 – August 26, 2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,541,936
|
|
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
|
Item 3.
|
Defaults Upon Senior Securities
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
|
|
|
Exhibit
Number
|
Description
|
|
|
|
|
|
|
|
|
31.1
*
|
|
|
|
31.2
*
|
|
|
|
32
**
|
|
|
|
10.1
**
|
|
|
|
101*
|
The following materials from The Finish Line, Inc.’s Form 10-Q for the quarterly period ended August 26, 2017, formatted in an XBRL Interactive Data File: (i) Consolidated Balance Sheets-unaudited; (ii) Consolidated Statements of Income-unaudited; (iii) Consolidated Statements of Cash Flows-unaudited; and (iv) Notes to Consolidated Financial Statements-unaudited, with detailed tagging of notes and financial statement schedules.
|
|
|
|
|
|
|
THE FINISH LINE, INC.
|
|
|
|
|
|
Date:
|
September 22, 2017
|
By:
|
/s/ Edward W. Wilhelm
|
|
|
|
Edward W. Wilhelm
|
|
|
|
Executive Vice President, Chief Financial Officer
|
|
|
Exhibit
Number
|
Description
|
|
|
|
|
|
|
|
|
31.1
*
|
|
|
|
31.2
*
|
|
|
|
32
**
|
|
|
|
10.1
**
|
|
|
|
101*
|
The following materials from The Finish Line, Inc.’s Form 10-Q for the quarterly period ended August 26, 2017, formatted in an XBRL Interactive Data File: (i) Consolidated Balance Sheets-unaudited; (ii) Consolidated Statements of Income-unaudited; (iii) Consolidated Statements of Cash Flows-unaudited; and (iv) Notes to Consolidated Financial Statements-unaudited, with detailed tagging of notes and financial statement schedules.
|
If to the Company:
The Finish Line, Inc.
3308 N. Mitthoefer Road
Indianapolis, Indiana 46235
Attention: Chairperson of the Compensation Committee
If to Director:
To the most recent address of Director set forth in the personnel records of the Company.
|
AGREED TO BY:
|
|
|
|
|
|
|
|
The Finish Line, Inc.
|
|
|
|
|
|
|
/s/ Norman H. Gurwitz
|
|
By:
|
/s/ Samuel M. Sato
|
|
Norman H. Gurwitz
|
|
Samuel M. Sato, CEO
|
||
Dated:
|
7/11/2017
|
|
Dated:
|
7/11/2017
|
1.
|
I have reviewed this quarterly report on Form 10-Q of The Finish Line, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report), that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
Date:
|
September 22, 2017
|
|
|
By:
|
/s/ Samuel M. Sato
|
|
Samuel M. Sato
|
|
Chief Executive Officer and Director
|
1.
|
I have reviewed this quarterly report on Form 10-Q of The Finish Line, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report), that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
Date:
|
September 22, 2017
|
|
|
By:
|
/s/ Edward W. Wilhelm
|
|
Edward W. Wilhelm
|
|
Executive Vice President, Chief Financial Officer
|
•
|
The Quarterly Report of the Company on Form 10-Q for the
thirteen
and
twenty-six weeks ended
August 26, 2017
fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78); and
|
•
|
The information contained in such report fairly presents, in all material respects, the financial condition and results of operation of the Company.
|
|
|
Date:
|
September 22, 2017
|
|
|
By:
|
/s/ Samuel M. Sato
|
|
Samuel M. Sato
|
|
Chief Executive Officer and Director
|
|
|
By:
|
/s/ Edward W. Wilhelm
|
|
Edward W. Wilhelm
|
|
Executive Vice President, Chief Financial Officer
|