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Form 8-K FINISH LINE INC /IN/ For: Jan 04

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January 4, 2017 5:29 PM EST

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): January 4, 2017


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 8.01 Other Events.

The Finish Line, Inc. (the “Company”) previously announced it is exploring strategic alternatives for JackRabbit, the Company’s specialty running store chain. The Company began accounting for the anticipated disposition of JackRabbit as a discontinued operation in its consolidated financial statements for the period ended November 26, 2016, as reflected in the Company’s Quarterly Report on Form 10-Q as filed with the Securities and Exchange Commission (“SEC”)on January 4, 2017.

To give further effect to the anticipated disposition of JackRabbit, the Company’s historical results, as adjusted on a pro forma basis, are reflected in the unaudited pro forma financial statement set forth in Exhibit 99.1. These financial statements reflect the Company’s results of operations based on available information and certain assumptions believed to be reasonable under the circumstances, including the assumption that the anticipated disposition of JackRabbit has been completed on the first day of the respective periods of each financial statement.

The unaudited pro forma financial statements and further information regarding the unaudited pro forma financial data are set forth in Exhibit 99.1 attached to this Form 8-K. The unaudited pro forma financial statements do not purport to represent or project any actual results of operations and should be read in conjunction with other reports as indicated in Exhibit 99.1.

The information in this Current Report, including Exhibit 99.1 hereto, shall not be deemed “filed” for the 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.


Forward-Looking Statements

This unaudited pro forma financial statements include information, statements, and assumptions 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 macroeconomic 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; a major failure of technology and information systems; risks associated with any strategic alternatives carried out with respect to JackRabbit, including any sale or similar transaction; 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.



1

Item 9.01 Financial Statements and Exhibits.

(b) Unaudited Pro Forma Consolidated Financial Statements

The following unaudited pro forma consolidated financial statements of the Company and its subsidiaries are attached hereto as Exhibit 99.1:

(i)
Unaudited pro forma consolidated statements of operations for the thirteen weeks ended August 27, 2016, May 28, 2016, February 27, 2016, August 29, 2015, and May 30, 2015

(ii)
Unaudited pro forma consolidated statements of operations for the years ended February 27, 2016 and February 28, 2015


(d) Exhibits

Exhibit Number
Description
99.1
Unaudited Pro Forma Consolidated Financial Statements


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: January 4, 2017
 
By:
/s/ Edward W. Wilhelm                
 
 
Name:
Edward W. Wilhelm
 
 
Title:
Executive Vice President, Chief Financial Officer
    

3
Exhibit 99.1


Unaudited Pro Forma Consolidated Financial Statements


The following unaudited pro forma financial data reflects The Finish Line, Inc.’s (the “Company”) historical results as adjusted on a pro forma basis to give effect to the anticipated disposition of the JackRabbit business (“JackRabbit”). The Company began accounting for the anticipated disposition as a discontinued operation in its consolidated financial statements for the period ended November 26, 2016.

The unaudited pro forma consolidated statements of operations for the fiscal years ended February 27, 2016 and February 28, 2015 and for the thirteen weeks ended August 27, 2016, May 28, 2016, February 27, 2016, August 29, 2015, and May 30, 2015 present the Company’s results of operations assuming that the anticipated disposition of JackRabbit had been completed on the first day of these respective periods presented. The adjustments set forth in the “JackRabbit” column represent the actual JackRabbit results with no further pro forma adjustments.

The unaudited pro forma consolidated statements of operations for the periods presented do not purport to represent what the Company’s consolidated results of operations actually would have been had the disposition of JackRabbit occurred on the dates noted above, or to project our consolidated results of operations for any future periods. The pro forma adjustments are based upon available information and certain assumptions that management believes are reasonable under the circumstances. The pro forma results should be read in conjunction with the consolidated financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended February 27, 2016 and the Company’s Quarterly Report on Form 10-Q for the quarterly periods ended August 27, 2016, May 28, 2016, August 29, 2015, and May 30, 2015.

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 970 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 or Twitter.com/FinishLineNews and “like” Finish Line on Facebook at Facebook.com/FinishLine. Track loyalty points and find store and product information with the free Finish Line app downloadable for iOS and Android customers.

Forward-Looking Statements

The unaudited pro forma financial statements include information, statements, and assumptions 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 macroeconomic 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; a major failure of technology and information systems; risks associated with any strategic alternatives carried out with respect to JackRabbit, including any sale or similar transaction; 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

4

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.

5


 
 
The Finish Line, Inc.
Unaudited Pro Forma Consolidated Statements of Operations
For the Thirteen Weeks Ended August 27, 2016
(In thousands, except per share data)
 
 
Thirteen Weeks Ended
 
 
Historical
 
JackRabbit
 
Pro Forma
Net sales
 
$
509,403

 
$
(24,247
)
 
$
485,156

Cost of sales (including occupancy costs)
 
349,929

 
(18,482
)
 
331,447

Gross profit
 
159,474

 
(5,765
)
 
153,709

Selling, general, and administrative expenses
 
124,224

 
(7,713
)
 
116,511

Impairment charges and store closing costs
 
336

 
(154
)
 
182

Operating income
 
34,914

 
2,102

 
37,016

Interest expense, net
 
(32
)
 
—

 
(32
)
Income from continuing operations before income taxes
 
34,882

 
2,102

 
36,984

Income tax expense
 
12,807

 
820

 
13,627

Net income
 
$
22,075

 
$
1,282

 
$
23,357

Earnings per share attributable to The Finish Line, Inc. shareholders:
 
 
 
 
 
 
     Basic
 
$
0.53

 
 
 
$
0.56

     Diluted
 
$
0.53

 
 
 
$
0.56

Weighted average shares outstanding:
 
 
 
 
 
 
     Basic
 
40,944

 
 
 
40,944

     Diluted
 
41,122

 
 
 
41,122

  



6


 
 
The Finish Line, Inc.
Unaudited Pro Forma Consolidated Statements of Operations
For the Thirteen Weeks Ended May 28, 2016
(In thousands, except per share data)
 
 
Thirteen Weeks Ended
 
 
Historical
 
JackRabbit
 
Pro Forma
Net sales
 
$
453,515

 
$
(23,471
)
 
$
430,044

Cost of sales (including occupancy costs)
 
313,704

 
(16,837
)
 
296,867

Gross profit
 
139,811

 
(6,634
)
 
133,177

Selling, general, and administrative expenses
 
124,899

 
(7,350
)
 
117,549

Impairment charges and store closing costs
 
35

 
(35
)
 
—

Operating income
 
14,877

 
751

 
15,628

Interest income, net
 
6

 
—

 
6

Income from continuing operations before income taxes
 
14,883

 
751

 
15,634

Income tax expense
 
5,257

 
289

 
5,546

Net income
 
$
9,626

 
$
462

 
$
10,088

Earnings per share attributable to The Finish Line, Inc. shareholders:
 
 
 
 
 
 
     Basic
 
$
0.23

 
 
 
$
0.24

     Diluted
 
$
0.23

 
 
 
$
0.24

Weighted average shares outstanding:
 
 
 
 
 
 
     Basic
 
41,769

 
 
 
41,769

     Diluted
 
41,890

 
 
 
41,890



7


 
 
The Finish Line, Inc.
Unaudited Pro Forma Consolidated Statements of Operations
For the Thirteen Weeks Ended February 27, 2016
(In thousands, except per share data)
 
 
Thirteen Weeks Ended
 
 
Historical
 
JackRabbit
 
Pro Forma
Net sales
 
$
580,254

 
$
(20,409
)
 
$
559,845

Cost of sales (including occupancy costs)
 
383,961

 
(15,116
)
 
368,845

Gross profit
 
196,293

 
(5,293
)
 
191,000

Selling, general, and administrative expenses
 
144,580

 
(7,986
)
 
136,594

Impairment charges and store closing costs
 
48,183

 
(5,041
)
 
43,142

Operating income
 
3,530

 
7,734

 
11,264

Interest expense, net
 
(61
)
 
—

 
(61
)
Income from continuing operations before income taxes
 
3,469

 
7,734

 
11,203

Income tax (benefit) expense
 
(567
)
 
3,011

 
2,444

Net income
 
$
4,036

 
$
4,723

 
$
8,759

Earnings per share attributable to The Finish Line, Inc. shareholders:
 
 
 
 
 
 
     Basic
 
$
0.09

 
 
 
$
0.20

     Diluted
 
$
0.09

 
 
 
$
0.20

Weighted average shares outstanding:
 
 
 
 
 
 
     Basic
 
43,415

 
 
 
43,415

     Diluted
 
43,513

 
 
 
43,513





8


 
 
The Finish Line, Inc.
Unaudited Pro Forma Consolidated Statements of Operations
For the Thirteen Weeks Ended August 29, 2015
(In thousands, except per share data)
 
 
Thirteen Weeks Ended
 
 
Historical
 
JackRabbit
 
Pro Forma
Net sales
 
$
483,150

 
$
(24,437
)
 
$
458,713

Cost of sales (including occupancy costs)
 
323,943

 
(16,097
)
 
307,846

Gross profit
 
159,207

 
(8,340
)
 
150,867

Selling, general, and administrative expenses
 
117,604

 
(8,155
)
 
109,449

Impairment charges and store closing costs
 
160

 
—

 
160

Operating income
 
41,443

 
(185
)
 
41,258

Interest income (expense), net
 
1

 
—

 
1

Income from continuing operations before income taxes
 
41,444

 
(185
)
 
41,259

Income tax expense
 
15,583

 
124

 
15,707

Net income from continuing operations
 
25,861

 
(309
)
 
25,552

Net loss attributable to redeemable noncontrolling interest
 
41

 
(41
)
 
—

Net income attributable to The Finish Line, Inc.
 
$
25,902

 
$
(350
)
 
$
25,552

Earnings per share attributable to The Finish Line, Inc. shareholders:
 
 
 
 
 
 
     Basic
 
$
0.57

 
 
 
$
0.56

     Diluted
 
$
0.57

 
 
 
$
0.56

Weighted average shares outstanding:
 
 
 
 
 
 
     Basic
 
44,866

 
 
 
44,866

     Diluted
 
45,207

 
 
 
45,207


9


 
 
The Finish Line, Inc.
Unaudited Pro Forma Consolidated Statements of Operations
For the Thirteen Weeks Ended May 30, 2015
(In thousands, except per share data)
 
 
Thirteen Weeks Ended
 
 
Historical
 
JackRabbit
 
Pro Forma
Net sales
 
$
443,394

 
$
(23,996
)
 
$
419,398

Cost of sales (including occupancy costs)
 
304,418

 
(16,135
)
 
288,283

Gross profit
 
138,976

 
(7,861
)
 
131,115

Selling, general, and administrative expenses
 
116,457

 
(8,381
)
 
108,076

Impairment charges and store closing costs
 
168

 
—

 
168

Operating income
 
22,351

 
520

 
22,871

Interest expense, net
 
(2
)
 
—

 
(2
)
Income from continuing operations before income taxes
 
22,349

 
520

 
22,869

Income tax expense
 
8,615

 
185

 
8,800

Net income from continuing operations
 
13,734

 
335

 
14,069

Net loss attributable to redeemable noncontrolling interest
 
55

 
(55
)
 
—

Net income attributable to The Finish Line, Inc.
 
$
13,789

 
$
280

 
$
14,069

Earnings per share attributable to The Finish Line, Inc. shareholders:
 
 
 
 
 
 
     Basic
 
$
0.30

 
 
 
$
0.31

     Diluted
 
$
0.30

 
 
 
$
0.30

Weighted average shares outstanding:
 
 
 
 
 
 
     Basic
 
45,436

 
 
 
45,436

     Diluted
 
45,719

 
 
 
45,719


10


 
 
The Finish Line, Inc.
Unaudited Pro Forma Consolidated Statements of Operations
For the Year Ended February 27, 2016
(In thousands, except per share data)
 
 
Historical
 
JackRabbit
 
Pro Forma
Net sales
 
$
1,888,888

 
$
(89,906
)
 
$
1,798,982

Cost of sales (including occupancy costs)
 
1,305,896

 
(62,936
)
 
1,242,960

Gross profit
 
582,992

 
(26,970
)
 
556,022

Selling, general, and administrative expenses
 
503,660

 
(33,824
)
 
469,836

Impairment charges and store closing costs
 
48,692

 
(5,055
)
 
43,637

Operating income
 
30,640

 
11,909

 
42,549

Interest expense, net
 
(65
)
 
—

 
(65
)
Income from continuing operations before income taxes
 
30,575

 
11,909

 
42,484

Income tax expense
 
8,779

 
4,783

 
13,562

Net income from continuing operations
 
21,796

 
7,126

 
28,922

Net loss attributable to redeemable noncontrolling interest
 
96

 
(96
)
 
—

Net income attributable to The Finish Line, Inc.
 
$
21,892

 
$
7,030

 
$
28,922

Earnings per share attributable to The Finish Line, Inc. shareholders:
 
 
 
 
 
 
     Basic
 
$
0.49

 
 
 
$
0.64

     Diluted
 
$
0.48

 
 
 
$
0.64

Weighted average shares outstanding:
 
 
 
 
 
 
     Basic
 
44,565

 
 
 
44,565

     Diluted
 
44,787

 
 
 
44,787


11


 
 
The Finish Line, Inc.
Unaudited Pro Forma Consolidated Statements of Operations
For the Year Ended February 28, 2015
(In thousands, except per share data)
 
 
Historical
 
JackRabbit
 
Pro Forma
Net sales
 
$
1,820,586

 
$
(69,879
)
 
$
1,750,707

Cost of sales (including occupancy costs)
 
1,236,783

 
(54,419
)
 
1,182,364

Gross profit
 
583,803

 
(15,460
)
 
568,343

Selling, general, and administrative expenses
 
459,455

 
(27,446
)
 
432,009

Impairment charges and store closing costs
 
3,918

 
(1,888
)
 
2,030

Operating income
 
120,430

 
13,874

 
134,304

Interest expense, net
 
(15
)
 
—

 
(15
)
Income from continuing operations before income taxes
 
120,415

 
13,874

 
134,289

Income tax expense
 
40,673

 
4,518

 
45,191

Net income from continuing operations
 
79,742

 
9,356

 
89,098

Net loss attributable to redeemable noncontrolling interest
 
2,251

 
(2,251
)
 
—

Net income attributable to The Finish Line, Inc.
 
$
81,993

 
$
7,105

 
$
89,098

Earnings per share attributable to The Finish Line, Inc. shareholders:
 
 
 
 
 
 
     Basic
 
$
1.71

 
 
 
$
1.86

     Diluted
 
$
1.70

 
 
 
$
1.85

Weighted average shares outstanding:
 
 
 
 
 
 
     Basic
 
47,268

 
 
 
47,268

     Diluted
 
47,658

 
 
 
47,658


















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

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