ITEM 2.05. Costs Associated with Exit or Disposal Activities.
On August 27, 2007, the Board of Directors of The Finish Line, Inc. (the “Company”) approved management’s recommendation to proceed with the closure of the Company’s Paiva store concept. The Company notified affected employees of this decision on August 27, 2007. The decision to take this action resulted from a thorough assessment and analysis, which revealed the concept was not demonstrating the potential necessary to deliver an acceptable long-term return on investment.
The Company plans to close all 15 Paiva stores and online business by the end of the third quarter.
The Company anticipates the pre-tax expense associated with the closure of Paiva will approximate $21 million, which primarily consists of approximately $12 million of long-term asset costs, $8 million of lease termination costs and $1 million of inventory write offs. These costs will be recognized during the second and third quarters of fiscal 2008, but certain cash payments associated with lease termination costs will be paid in later periods over the various remaining lease terms.
Forward-looking Statements
Certain statements contained in the attached press release and this Form 8-K regard matters that are not historical facts and are forward looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, as amended, and the rules promulgated pursuant to the Securities Act of 1933, as amended. These forward-looking statements generally can be identified by use of statements that include words such as “expect,” “anticipate,” “believe,” “plan,” and other similar words. Forward-looking statements include, without limitation, statements regarding the anticipated timing, number of impacted employees, and pre-tax expenses associated with the closure of the Paiva concept.
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, without limitation, the risk that subsequent unanticipated events, including unanticipated costs, may occur in connection with the closure of Paiva. Additional risk factors that could cause results to differ are set forth in the “Risk Factors,” “Legal Proceedings” and “Management Discussion and Analysis of Results of Operations and Financial Condition” sections of, and elsewhere, in the Company’s Annual Report on Form 10-K for the fiscal year ended March 3, 2007.
The Company undertakes no obligation to release publicly the results of any revisions to these forward looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
ITEM 7.01. Regulation FD Disclosure.
On August 27, 2007, the Company issued a press release announcing its intent to close its Paiva store concept. 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.
