MARCH 25, 2004 -- Net Q4 sales of The Finish Line increased 30% to $305.3 million. Comp-store net sales increased 19 for Q4 on top of a 10% increase reported for Q4 LY. On a GAAP basis, net income for Q4 increased 37% to $21.0 million or $0.86 per diluted share versus $0.66 per diluted share in Q4 LY. This is an increase of 30% in diluted earnings per share.
In Q4 LY, Finish Line recognized a gain from a tornado insurance settlement of $0.20 per diluted share less asset impairment charges of $0.04 per diluted share. Excluding these items noted above, non-GAAP adjusted diluted earnings per share would have been $0.50 per share in Q4 LY. Therefore, Q4 earnings per diluted share of $0.86 increased 72% versus comparable earnings of $0.50 per diluted share for Q4 LY.
Net FY sales increased 30% to $985.9 million. Comp-store net sales increased 20% for FY 2004 on top of a 3% increase for FY 2003.
On a GAAP basis, net income for FY 2004 increased 89% to $47.3 million or $1.96 per diluted share versus $1.03 per diluted share for Fiscal 2003. Fiscal 2004 included a gain from the insurance settlement of $0.03 per diluted share. Finish Line reported net income for FY 2003 of $25.0 million or $1.03 per diluted share that included a gain from the insurance settlement of $0.19 per diluted share and repositioning reversal of $0.03 per diluted share less asset impairment charges of $0.04 per diluted share. Excluding these items noted above, FY 2004 non-GAAP adjusted net income per diluted share on a comparable basis would have been $1.93 versus $0.85 in FY 2003, or an increase of 127%.
"We are pleased to report a 30% increase (GAAP basis) in diluted earnings per share and a 72% increase in non-GAAP adjusted earnings per share for the fourth quarter of Fiscal 2004 versus the same period last year," stated Alan Cohen, Finish Line's CEO. "We made progress in all line items of the income statement as gross profit margin improved 210 basis points (occupancy costs improving 170 basis points and product margins increasing 40 basis points), while SG&A expenses improved 110 basis points.
"Our balance sheet remains strong with $95.9 million in cash and marketable securities and no interest bearing debt, and our stockholders' equity is $323.3 million, which supports our financial flexibility. We continue to benefit from our position as the premier destination for athletic footwear, and we are optimistic as we go forward into FY 2005."
Merchandise inventories were $192.6 million at February 28, 2004 compared to $158.8 million at March 1, 2003. On a per-square-foot basis, merchandise inventories at fiscal year-end increased approximately 12% compared to one year ago.
The company operated 531 stores at February 28, 2004, an increase of 11% over the 477 stores operated one year ago. For the full fiscal year, the company opened 58 new stores, remodeled 27 existing stores and closed four stores. Total retail square footage increased 9% to 3,081,000 at February 28, 2004 versus 2,839,000 at March 1, 2003.
With the improved Q4 results and an increase to FY 2005 Q1 guidance, the company announced it has increased diluted EPS guidance for FY 2005 to a range of $2.29 to $2.33 from $2.22 to $2.26.