8-K

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): September 22, 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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Item 2.02 Results of Operations and Financial Condition.

On September 22, 2017, The Finish Line, Inc. issued a press release discussing its results of operations for the thirteen weeks ended August 26, 2017, and its financial condition as of August 26, 2017.

A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference. The information in this Current Report, including Exhibit 99.1 hereto, shall not be deemed “filed” for 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.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Election of Faisal Masud to Board of Directors

On September 19, 2017, the Board of Directors of the Company elected Faisal Masud as a director of the Company, effective immediately. Mr. Masud will serve as a Class II director for a term expiring at the Company’s 2018 annual meeting of shareholders.

Mr. Masud, age 45, currently serves as the Chief Technology Officer at Staples, Inc., a position he has held since December 2016. As part of Mr. Masud’s duties at Staples, he operates the entire technology team for the enterprise, is responsible for managing the company’s e-commerce platform, and manages Staples (PNI) which powers the print platform at Staples. Over the past five years while at Staples, Mr. Masud also has managed the company’s global customer service function, and was responsible for managing innovation at the company. Prior to joining Staples, Mr. Masud served as a Vice President and General Manager at Groupon, Inc. where he was responsible for managing Groupon Goods’ strategy and execution in more than 35 countries. Prior to Groupon, Mr. Masud was Head of Global Shipping and Fulfillment at eBay, and General Manager, Worldwide Warehouse Deals and Global Sourcing, at Amazon. Mr. Masud currently serves as a director of Globoforce Group PLC, a position he has held since July 2015. Mr. Masud holds a Bachelor of Science degree in business administration from Southeastern University.

Mr. Masud will be appointed to the Compensation Committee of the Company’s Board of Directors. He will be eligible to receive the standard director compensation previously established by the Board’s Compensation Committee and generally offered to other non-employee directors, as further described in the Company’s Definitive Proxy Statement for the 2017 Annual Meeting of Shareholders filed with the Securities and Exchange Commission (“SEC”) on June 2, 2017. Other than being eligible to receive such director compensation, Mr. Masud did not enter into any material plan, contract, or arrangement in connection with his election as a director. Mr. Masud is not a party to any transaction with the Company that would require disclosure under Item 404(a) of SEC Regulation S-K.

On September 22, 2017, the Company issued a press release announcing the election of Mr. Masud to the Board of Directors. A copy of the press release is attached as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated by reference herein.

Departure of Imran Jooma

On September 18, 2017, Imran Jooma, the Company’s Executive Vice President, Divisional President, Omnichannel Strategy, announced his resignation from the Company, effective as of October 14, 2017, to pursue other business opportunities. Mr. Jooma has served in his current position since February 2016, and he previously served as Executive Vice President, Chief Omnichannel Officer, of the Company from February 2015 to February 2016.

In conjunction with Mr. Jooma’s resignation, the Employment Agreement dated February 9, 2015 between the Company and Mr. Jooma will terminate on the effective date of his resignation, other than those provisions of the employment agreement that by their terms survive termination of employment.

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Item 8.01 Other Events.

On September 19, 2017, the Board of Directors of the Company, in accordance with Section 5.2 of the Company’s Bylaws, reduced the size of the Board from nine to eight members, effective immediately.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

The following exhibits are being furnished with this Current Report on Form 8-K.

Exhibit Number	Description
99.1	Press release issued September 22, 2017, regarding results of operations
99.2	Press release issued September 22, 2017, regarding Faisal Masud election to Board of Directors

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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: September 22, 2017	By:	/s/ Edward W. Wilhelm
	Name:	Edward W. Wilhelm
	Title:	Executive Vice President, Chief Financial Officer

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EX-99.1

Exhibit 99.1

Finish Line Reports Second Quarter Fiscal Year 2018 Results

INDIANAPOLIS, September 22, 2017 – The Finish Line, Inc. (NASDAQ: FINL) today reported results for the thirteen weeks ended August 26, 2017.

For the thirteen weeks ended August 26, 2017:

● Consolidated net sales were $469.4 million, a decrease of 3.3% over the prior year period.

● Finish Line comparable store sales decreased 4.5%.

● Finish Line Macy’s sales increased 5.6%.

● On a GAAP basis, diluted earnings per share from continuing operations were $0.08.

● Non-GAAP diluted earnings per share from continuing operations, which primarily excludes the impact from store impairment charges, were $0.12.

“Our second quarter results were shaped by a very promotional marketplace for athletic footwear,” said Sam Sato, Chief Executive Officer of Finish Line. “With industry headwinds weighing on our sales and margin trends, we remain disciplined in managing our expenses and inventories. While we are planning for a challenging retail environment in the near-term, we are confident that the merchandise, digital, in-store and operational initiatives currently in place will allow us to achieve our current full year outlook and best position the company to deliver increased shareholder value over the long-term.”

Balance Sheet

As of August 26, 2017, consolidated merchandise inventories decreased 11.1% to $308.1 million compared to $346.4 million as of August 27, 2016.

As of August 26, 2017, the company had no interest-bearing debt and $114.9 million in cash and cash equivalents.

Outlook

The company’s outlook remains unchanged from the update given August 28, 2017 which is Finish Line comparable sales to decrease 3% to 5% versus its previous guidance for an increase in the low-single digit range. Adjusted earnings per share are now expected to be in the range of $0.50 to $0.60 for the 53-week fiscal year ending March 3, 2018, versus the previous guidance range of $1.12 to $1.23, and compared with adjusted earnings per share of $1.06 for the fiscal year ended February 25, 2017, which was a 52-week year. The company estimates that the additional week will contribute approximately $0.06 per share to fourth quarter and full year fiscal 2018 results. 

For the third quarter ending November 25, 2017, the company expects Finish Line comparable sales to decrease 3% to 5% and adjusted loss per share to be in the range of ($0.32) to ($0.40), compared with an adjusted loss per share of ($0.24) for the same period last year. 

For the fourth quarter ending March 3, 2018, a 14-week quarter, the company expects Finish Line comparable sales to decrease 3% to 5% and adjusted earnings per share to be in the range of $0.50 to $0.58 inclusive of the $0.06 per share contribution from the extra week, compared with earnings per share of $0.50 for the fourth quarter ended February 25, 2017, a 13-week quarter. 

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Q2 Fiscal 2018 Conference Call Today, September 22, 2017 at 8:30 a.m.

The company will host a conference call for investors today, September 22, 2017, at 8:30 a.m. Eastern. To participate in the live conference call, dial 866-923-8645 (US and Canada) or 660-422-4970 (International), conference ID #82802203. 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 855-859-2056, conference ID #82802203. This recording will be made available through Sunday, October 22, 2017. The replay will also be accessible online at www.finishline.com.

Disclosure Regarding Non-GAAP Measures

This report refers to certain financial measures that are identified as non-GAAP. The company believes that these non-GAAP measures, including selling, general, and administrative expenses, operating income, income tax expense, net income from continuing operations, and diluted earnings per share from continuing operations, are helpful to investors because they allow for a more direct comparison of the company’s year-over-year performance and are useful in assessing the company’s progress in achieving its long-term financial objectives. This supplemental information should not be considered in isolation or as a substitute for the related GAAP measures. A reconciliation of the non-GAAP measures to the comparable GAAP measures can be found in the company’s Form 8-K filed with the Securities and Exchange Commission with this release.

About The Finish Line, Inc.

The Finish Line, Inc. is a premium retailer that carries the latest and greatest shoes, apparel, and accessories. Headquartered in Indianapolis, Finish Line runs approximately 950 branded locations in U.S. malls and shops inside Macy’s department stores. Finish Line employs more than 14,000 associates who connect customers to sneaker culture through style and sport. Shop online at www.finishline.com or get access to everything on the Finish Line app. Also keep track of what’s fresh by following Finish Line on Instagram, Snapchat, and Twitter.

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 “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; 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.

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	The Finish Line, Inc. Consolidated Statements of Income (Unaudited) (In thousands, except per share and store/shop data)
	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
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
Finish Line store activity for the period:
Beginning of period	571			586			573			591
Opened	—			4			—			5
Closed	(2		)	(5		)	(4		)	(11		)
End of period	569			585			569			585
Square feet at end of period							3,175,989			3,249,455
Average square feet per store							5,582			5,555
Branded shops within department stores activity for the period:
Beginning of period	375			392			374			392
Opened	3			—			4			—
Closed	—			(1		)	—			(1		)
End of period	378			391			378			391
Square feet at end of period							533,219			509,880
Average square feet per shop							1,411			1,304

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	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	%

	Condensed Consolidated Balance Sheets
	August 26, 2017		August 27, 2016		February 25, 2017
	(Unaudited)		(Unaudited)
ASSETS
Cash and cash equivalents	$	114,918	$	114,301	$	90,856
Merchandise inventories, net	308,074		346,385		331,146
Other current assets	46,045		34,972		69,408
Assets held for sale	—		76,089		—
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
Total assets	$	714,039	$	825,321	$	746,468
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities	$	195,241	$	231,379	$	221,971
Liabilities held for sale	—		16,210		—
Deferred credits from landlords	34,255		32,021		32,133
Other long-term liabilities	30,919		30,517		40,866
Shareholders’ equity	453,624		515,194		451,498
Total liabilities and shareholders’ equity	$	714,039	$	825,321	$	746,468

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Reconciliation of Selling, General, and Administrative Expenses, GAAP to Selling, General, and Administrative Expenses, Non-GAAP (Unaudited)

(In thousands)

	Thirteen Weeks Ended								Twenty-Six Weeks Ended
	August 26, 2017				August 27, 2016				August 26, 2017					August 27, 2016
Selling, general, and administrative expenses, GAAP	$	121,772	26.0	%	$	116,511	24.0	%	$	234,184		26.0	%	$	234,060	25.5	%
Employee severance, retirement, and other costs	—		—		—		—		(338		)	—		—		—
Selling, general, and administrative expenses, Non-GAAP	$	121,772	26.0	%	$	116,511	24.0	%	$	233,846		26.0	%	$	234,060	25.5	%

Reconciliation of Operating Income, GAAP to Operating Income, Non-GAAP (Unaudited)

(In thousands)

	Thirteen Weeks Ended								Twenty-Six Weeks Ended
	August 26, 2017				August 27, 2016				August 26, 2017				August 27, 2016
Operating income, GAAP	$	6,225	1.3	%	$	37,016	7.6	%	$	19,082	2.1	%	$	52,644	5.8	%
Employee severance, retirement, and other costs	—		—		—		—		338		—		—		—
Impairment charges and store closing costs	2,335		0.5		182		0.1		4,493		0.6		182		—
Operating income, Non-GAAP	$	8,560	1.8	%	$	37,198	7.7	%	$	23,913	2.7	%	$	52,826	5.8	%

Reconciliation of Income Tax Expense, GAAP to Income Tax Expense, Non-GAAP (Unaudited)

(In thousands)

	Thirteen Weeks Ended								Twenty-Six Weeks Ended
	August 26, 2017				August 27, 2016				August 26, 2017				August 27, 2016
Income tax expense, GAAP	$	2,888	0.6	%	$	13,627	2.8	%	$	7,748	0.8	%	$	19,173	2.1	%
Tax effect of:
Employee severance, retirement, and other costs	—		—		—		—		130		—		—		—
Impairment charges and store closing costs	895		0.2		70		0.1		1,726		0.3		70		—
Income tax expense, Non-GAAP	$	3,783	0.8	%	$	13,697	2.9	%	$	9,604	1.1	%	$	19,243	2.1	%

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Reconciliation of Net Income From Continuing Operations, GAAP to

Net Income From Continuing Operations, Non-GAAP (Unaudited)

(In thousands)

	Thirteen Weeks Ended								Twenty-Six Weeks Ended
	August 26, 2017				August 27, 2016				August 26, 2017				August 27, 2016
Net income from continuing operations, GAAP	$	3,347	0.7	%	$	23,357	4.8	%	$	11,344	1.3	%	$	33,445	3.7	%
Employee severance, retirement, and other costs, net of income taxes	—		—		—		—		208		—		—		—
Impairment charges and store closing costs, net of income taxes	1,440		0.3		112		—		2,767		0.3		112		—
Net income from continuing operations, Non-GAAP	$	4,787	1.0	%	$	23,469	4.8	%	$	14,319	1.6	%	$	33,557	3.7	%

Reconciliation of Diluted Earnings Per Share From Continuing Operations, GAAP to

Diluted Earnings Per Share From Continuing Operations, Non-GAAP (Unaudited)

	Thirteen Weeks Ended				Twenty-Six Weeks Ended
	August 26, 2017		August 27, 2016		August 26, 2017		August 27, 2016
Diluted earnings per share from continuing operations, GAAP	$	0.08	$	0.56	$	0.28	$	0.79
Employee severance, retirement, and other costs, net of income taxes	—		—		—		—
Impairment charges and store closing costs, net of income taxes	0.04		—		0.07		—
Diluted earnings per share from continuing operations, Non-GAAP	$	0.12	$	0.56	$	0.35	$	0.79

Note: See Disclosure Regarding Non-GAAP Measures above.

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

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EX-99.2

Exhibit 99.2

Finish Line Appoints Faisal Masud To Board of Directors

INDIANAPOLIS, September 22, 2017 – Athletic retailer The Finish Line, Inc. (Nasdaq: FINL) announced today that its Board of Directors appointed Faisal Masud as a director of the Company effective September 19, 2017. Masud, Chief Technology Officer for Staples, Inc. (NASDAQ: SPLS), will serve as a Class II director for a term expiring at Finish Line’s 2018 annual meeting of shareholders. He will serve on the Compensation Committee of the Board of Directors. With the appointment of Masud, the Board of Directors increases from 7 to 8 directors

“With his technology expertise across enterprise systems, Faisal will bring key insight to Finish Line’s board as we move through the ever-changing retail environment,” said Glenn Lyon, Chairman of theFinish Line Board of Directors. “Faisal has held several roles at leading consumer-focused brands that have positioned him at the intersection of technology and the retail experience. He will be integral in assisting us with our long-term strategies related to e-commerce and online merchandise channels and maximizing value for our shareholders.”

Sam Sato, Chief Executive Officer of Finish Line added,“We value the vast experience that Faisal carries with him from his work in the retail industry. His insights related to the customer experience and digital technology will be incredibly beneficial as we continue to focus on customer engagement.”

“As a member of Finish Line’s board,” Masud stated, “I look forward to furthering the impact and direction of the company’s unique, personalized customer experience through its social, mobile and in-store engagement. I’m proud to be associated with a brand dedicated to providing industry-leading innovation.”

Prior to being appointed to his current position of CTO at Staples, Masud served as Executive Vice President of Global E-Commerce at Staples. Before joining Staples in 2013, Masud served as Vice President and General Manager at Groupon, Inc. responsible for managing Groupon Goods’ strategy and execution in more than 35 countries. His career also includes key leadership positions as Head of Global Shipping and Fulfillment at eBay and General Manager, Worldwide Warehouse Deals and Global Sourcing, at Amazon. Masud earned his Bachelor of Science degree in business administration from Southeastern University.

About The Finish Line, Inc.

The Finish Line, Inc. is a premium retailer that carries the latest and greatest shoes, apparel, and accessories. Headquartered in Indianapolis, Finish Line runs approximately 950 branded locations in U.S. malls and shops inside Macy’s department stores. Finish Line employs more than 14,000 associates who connect customers to sneaker culture through style and sport. Shop online at www.finishline.com or get access to everything on the Finish Line app. Also keep track of what’s fresh by following Finish Line on Instagram, Snapchat, and Twitter.

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 “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; 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.

Media Contact:

Dianna Boyce

Corporate Communications

317-613-6577