Alan H. Cohen, president and chief executive officer of The Finish Line, Inc (Nasdaq:FINL) announced earnings for the first quarter representing the thirteen weeks ended May 27, 2000.


Net sales increased 11% (eleven percent) to $146.7 million for the thirteen weeks ended May 27, 2000 (the ``first quarter'' or ``Q1'') compared to $132.3 million for the same quarter (13 weeks) last year ended May 29, 1999 (``Q1 LY''). Comparable store net sales decreased approximately 1% (negative one percent) for Q1 versus a decline of 5% (negative five percent) decrease for Q1 LY.

Net income for the quarter increased 2% (two percent) to $3.8 million compared to net income of $3.7 million for the first quarter of last year. Diluted earnings per share was $.15 which is flat compared the $.15 per share reported for Q1 LY. Diluted weighted average shares outstanding were 24,665,000 for the thirteen weeks ended May 27, 2000, a decrease of 533,000 shares or 2% (negative two percent) versus 25,198,000 shares outstanding for the same quarter of last year. The reduction in the diluted shares outstanding reflects the effects of the ongoing stock buyback program.

Merchandise inventories were $169.0 million at May 27, 2000 compared to $149.0 million at February 26, 2000. On a per square foot basis, merchandise inventories at the end of Q1 decreased approximately 4% (negative four percent) compared to one year ago.

The Company operated 423 stores at May 27, 2000, an increase of 14% (fourteen percent) over the 371 stores operated one year ago. For the quarter, the Company opened 14 new stores and remodeled/expanded 5 existing stores. Total retail square footage increased 17% (seventeen percent) to 2,567,000 at May 27, 2000 versus 2,198,000 square feet at the end Q1 LY.

Mr. Cohen stated, ``We are pleased to report a slight increase in net earnings for the quarter. Footwear continued to perform well in Q1, but was offset by a double digit comparable store sales decline in our apparel/accessories category. Product margins improved slightly for the quarter, however, overall gross profit margins declined due to continued occupancy cost increases as a percent to sales.''

``We plan to open approximately 30 new stores and remodel/expand 12 existing stores equating to a 7% to 8% increase in retail square footage for this fiscal year. Our balance sheet remains strong with over $18 million in cash and marketable securities and no interest bearing debt. Our inventories were down approximately 4% per square foot, which is on top of a 9% decrease per square foot one year ago. Our stockholders' equity has grown to $227 million, which approximates $9.20 per share. We are well positioned financially to remain flexible and strong during a difficult period for athletic retailing.''

The Company has experienced, and expects to continue to experience, significant variability in net sales and comparable store net sales from quarter to quarter. Therefore, the results of the periods presented herein are not necessarily indicative of the results to be expected for any other future period or year.

Certain statements contained in this press release regard matters that are not historical facts and are forward looking statements (as such term is defined in the rules promulgated pursuant to the Securities Act of 1933, as amended). Because such forward looking statements contain risks and uncertainties, actual results may differ materially from those expressed in or implied by such forward looking statements. Factors that could cause actual results to differ materially include, but are not limited to: changing consumer preferences; the Company's inability to successfully market its footwear, apparel, accessories and other merchandise; price, product and other competition from other retailers (including internet and direct manufacturer sales); the unavailability of products; the inability to locate and obtain favorable lease terms for the Company's stores; the loss of key employees, general economic conditions and adverse factors impacting the retail athletic industry; management of growth, and the other risks detailed in the Company's Securities and Exchange Commission filings. The Company undertakes no obligation to release publicly the results of any revisions to these forward looking statement that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

The Finish Line is a specialty retailer of men's, women's and children's brand name athletic and lifestyle footwear, activewear and accessories. The Company currently operates 426 stores in 42 states. The Company has made available a replay conference call covering this earnings release by calling 1-800-642-1687 (Conference ID No. 800079). This replay will be available for 48 hours commencing at approximately 9:45 a.m. eastern time on Thursday, June 29th.

The Finish Line, Inc.
Statements of Income
(In thousands, except per share and store data)
Thirteen weeks ended
May 27,
May 29,
Net sales
Cost of sales (including occupancy expenses)
Gross profit
Selling, general, and administrative expenses
Interest (income) - net
Income before income taxes
Provision for income taxes
Net income
$ 3,793
$ 3,706
Diluted weighted average shares outstanding
Diluted net income per share
$ 0.15
$ 0.15
Number of stores open at end of period


Condensed Balance Sheet
(In thousands)
May 27,
Feb. 26,
Cash and cash equivelants
$ 9,621
$ 13,061
Short term marketable securities
Merchandise inventories
Other current assets
Property and equipment, net
Deferred income taxes
Other assets
Total assets
Current liabilities
Long-term liabilities
Stockholders' equity
Total liabilities and stockholders' equity