Finish Line Reports Second Quarter Fiscal Year 2013 Results

INDIANAPOLIS--(BUSINESS WIRE)--

The Finish Line, Inc. FINL today reported results for the 13-week and 26-week periods ended September 1, 2012.

For the thirteen weeks ended September 1, 2012:

• Consolidated net sales, inclusive of Finish Line and The Running Company, increased 16.1% to $385.0 million.
• Finish Line comparable store sales increased 12.3% on top of an 11.0% increase for the same period a year ago.
• Digital comparable sales, which are included in the comparable store sales results, were up 29.6%.
• Earnings per diluted share increased 25.6% to $0.49.

“We are very pleased with the strength of our second quarter performance,” said Chairman and Chief Executive Officer Glenn Lyon. “Our ability to achieve double digit comps in the second quarter, on top of a double digit comp increase in the prior year period illustrates our ability to further expand our leadership position in athletic footwear. Second quarter sales were driven by market share gains in running and basketball as we have been able to capitalize on recent trends in each category enabled by our strong relationships with both vendors and consumers. Importantly, we translated a 16% top-line increase into 26% earnings growth even as we make the necessary investments in order to successfully execute our omni-channel vision. We move forward with sound strategies in place that we believe will further improve our consumer mindshare, deliver consistent sales and earnings growth, and return increased value to our shareholders.”

Balance Sheet

As of September 1, 2012, consolidated merchandise inventories increased 9.0% to $250.6 million compared to $229.8 million as of August 27, 2011. For Finish Line, merchandise inventories increased by 6.3%.

As of September 1, 2012, the company had no interest-bearing debt and $254.2 million in cash and cash equivalents, compared to $289.6 million a year ago.

Outlook

Based on second quarter results, the company now expects earnings per share for the fiscal year ending March 2, 2013 to increase between 6 to 9% over the $1.53 in fiscal 2012, which excludes the $0.07 impact from the 53rd week, up from its most recent guidance of 6 to 7% growth. This guidance assumes an annual comparable store sales increase of 6 to 8%.

Q2 Fiscal 2013 Conference Call Today, September 28, 2012 at 8:30 a.m.

The company will host a conference call for investors today, September 28, 2012, 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 #29801370. 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 800-858-8367, conference ID #29801370. This recording will be made available through Friday, October 5, 2012. The replay will also be accessible online at www.finishline.com.

About Finish Line

The Finish Line, Inc. is a premium retailer of athletic shoes, apparel and accessories. The company has two retail divisions -- Finish Line, which operates 638 Finish Line brand stores in malls across the U.S., and The Running Specialty Group, which operates 19 specialty running shops in seven states and the District of Columbia under The Running Company banner. Finish Line stores employ more than 11,000 sneakerologists who help customers every day connect with their sport, their life and their style. Online shopping is available at www.finishline.com and 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/FinishLineUSA. The Running Company stores carry a deep assortment of performance running shoes, apparel and accessories. Their trained experts advise everyone from beginner to advanced runners and provide free gait analysis to ensure the proper fit for each customer. The Running Company is tightly connected to its communities, hosting regular neighborhood group runs and sponsoring local races. More information on The Running Company can be found at www.run.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, but not limited to, “believe,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” “build,” “may,” “should,” “will,” “estimates,” “indication,” “potential,” “optimistic,” “confidence,” “momentum,” “continue,” “lead to,” “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 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); 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 the company undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.

					The Finish Line, Inc.
					Consolidated Statements of Income (Unaudited)
					(In thousands, except per share and store data)
					Thirteen					Thirteen					Twenty-Six					Twenty-Six
					Weeks Ended					Weeks Ended					Weeks Ended					Weeks Ended
					September 1,					August 27,					September 1,					August 27,
					2012					2011					2012					2011
Net sales					$	385,011				$	331,514				$	704,060				$	630,988
Cost of sales (including occupancy costs)						250,461					215,180					464,851					411,391
Gross profit						134,550					116,334					239,209					219,597
Selling, general and administrative expenses						94,711					82,076					179,557					158,751
Store closing costs						325					580					420					597
Operating income						39,514					33,678					59,232					60,249
Interest income, net						58					139					129					281
Income before income taxes						39,572					33,817					59,361					60,530
Income tax expense						15,136					12,897					22,844					23,194
Net income						24,436					20,920					36,517					37,336
Net loss attributable to redeemable noncontrolling interest						537					-					734					-
Net income attributable to The Finish Line, Inc.					$	24,973				$	20,920				$	37,251				$	37,336
Diluted earnings per share attributable to The Finish Line, Inc. shareholders					$	0.49				$	0.39				$	0.72				$	0.69
Diluted weighted average shares						50,866					53,143					51,135					53,573
Dividends declared per share					$	0.06				$	0.05				$	0.12				$	0.10
Finish Line store activity for the period:
Beginning of period						640					657					637					664
Opened						4					-					13					-
Closed						(6	)				(10	)				(12	)				(17	)
End of period						638					647					638					647
Square feet at end of period																3,449,041					3,487,044
Average square feet per store																5,406					5,390
Running Company store activity for the period:
Beginning of period						19					-					19					-
Opened						-					-					-					-
Closed						-					-					-					-
End of period						19					-					19					-
Square feet at end of period																60,436					-
Average square feet per store																3,181					-
					Thirteen Weeks Ended										Twenty-Six Weeks Ended
					September 1,					August 27,					September 1,					August 27,
					2012					2011					2012					2011
Net sales						100.0	%				100.0	%				100.0	%				100.0	%
Cost of sales (including occupancy costs)						65.0					64.9					66.0					65.2
Gross profit						35.0					35.1					34.0					34.8
Selling, general and administrative expenses						24.6					24.7					25.5					25.1
Store closing costs						0.1					0.2					0.1					0.1
Operating income						10.3					10.2					8.4					9.6
Interest income, net						-					-					-					-
Income before income taxes						10.3					10.2					8.4					9.6
Income tax expense						3.9					3.9					3.2					3.7
Net income						6.4					6.3					5.2					5.9
Net loss attributable to redeemable noncontrolling interest						0.1					-					0.1					-
Net income attributable to The Finish Line, Inc.						6.5	%				6.3	%				5.3	%				5.9	%
					Condensed Consolidated Balance Sheets
					September 1,					August 27,					March 3,
					2012					2011					2012
					(Unaudited)					(Unaudited)
ASSETS
Cash and cash equivalents					$	254,225				$	289,625				$	307,494
Merchandise inventories, net						250,634					229,836					220,405
Other current assets						25,742					12,830					24,849
Property and equipment, net						157,539					122,200					126,997
Other assets						33,273					31,941					31,751
Total assets					$	721,413				$	686,432				$	711,496
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities					$	138,814				$	155,859				$	138,683
Deferred credits from landlords						28,898					31,330					30,080
Other long-term liabilities						13,820					14,276					13,196
Redeemable noncontrolling interest						5,248					-					-
Shareholders' equity						534,633					484,967					529,537
Total liabilities and shareholders' equity					$	721,413				$	686,432				$	711,496