EXHIBIT 99
FOR IMMEDIATE RELEASE
INVESTOR CONTACT: MEDIA CONTACT:
Pamela Catlett Joani Komlos
03.671.4589 503.671.2013
NIKE, INC. REPORTS THIRD QUARTER EARNINGS
PER SHARE UP 36 PERCENT;
WORLDWIDE FUTURES ORDERS INCREASE 9.6 PERCENT
Highlights:
- - Record third quarter earnings per diluted share increased 36
percent to $1.01 versus $0.74 per diluted share a year ago
- - Highest third quarter revenues, up 14 percent to $3.3 billion
- - Gross margin improved 2.0 points to 44.1 percent
- - Worldwide futures orders increased 9.6 percent
Beaverton, OR (March 17, 2005) -- NIKE, Inc. (NYSE:NKE) today reported
revenues and earnings for the Company's third quarter ended February 28,
2005. Third quarter revenues increased 14 percent to $3.3 billion,
versus $2.9 billion for the same period last year. Third quarter net
income totaled $273.4 million, or $1.01 per diluted share, compared to
$200.3 million, or $0.74 per diluted share in the prior year.
"Today's results mark another terrific quarter for Nike, Inc.," said
William D. Perez, Nike, Inc. President and Chief Executive Officer.
"This was our sixth consecutive quarter of double-digit revenue and
earnings per share growth. These consistently strong results were
driven by excellent performance across geographies and brands, coupled
with favorable trends in foreign exchange rates. In addition to
another strong quarter for our U.S. business, emerging international
markets such as China, Russia and Brazil produced significant growth.
While the core Nike Brand fueled the majority of our growth, Nike Golf,
Converse and Cole Haan were also major contributors to our positive
results."*
Futures Orders
The Company reported worldwide futures orders for athletic footwear and
apparel, scheduled for delivery from March 2005 through July 2005,
totaling $5.2 billion, 9.6 percent higher than such orders reported for
the same period last year. Approximately one point of this growth was
due to changes in currency exchange rates.*
By region, futures orders for the U.S. were up nine percent; Europe
increased seven percent; Asia Pacific grew 14 percent; and the Americas
increased 22 percent. In Europe, two points of the increase were due
to currency exchange rates. Currency exchange rates contributed to the
growth in Asia Pacific and the Americas by approximately two points and
one point, respectively.*
Perez continued, "Global consumer demand for Nike brand footwear and
apparel continues to be strong, as evidenced by the growth in futures
orders. Demand in the U.S. market remains particularly robust, as Nike
product innovation continues to drive the trend toward performance
footwear and apparel in this market."*
Regional Highlights
U.S.
____
During the third quarter, U.S. revenues increased nine percent to $1.3
billion versus $1.2 billion for the third quarter of fiscal 2004. U.S.
athletic footwear revenues increased 10 percent to $849.6 million.
Apparel revenues increased five percent to $345.8 million. Equipment
revenues increased 12 percent to $72.8 million. U.S. pre-tax income
increased 10 percent to $259.5 million.
EMEA
____
Revenues for the Europe, Middle East and Africa region grew 18 percent
to $1.0 billion, up from $878.6 million for the same period last year.
Nine points of this growth were the result of changes in currency
exchange rates. Footwear revenues increased 14 percent to $615.3
million, apparel revenues increased 24 percent to $351.3 million and
equipment revenues increased 18 percent to $67.3 million. Pre-tax
income rose 28 percent to $219.3 million.
Asia Pacific
____________
Revenues in the Asia Pacific region grew 18 percent to $472.8 million
compared to $402.2 million a year ago. Five points of this growth were
the result of changes in currency exchange rates. Footwear revenues
were up 11 percent to $237.9 million, apparel revenues increased 25
percent to $188.3 million and equipment grew 23 percent to $46.6
million. Pre-tax income was up 16 percent to $100.4 million.
Americas
________
Revenues in the Americas region increased 10 percent to $143.7 million,
an improvement from $131.1 million in the third quarter of fiscal 2004.
Currency exchange rates resulted in a three-percentage point increase
in this growth rate. Footwear revenues were up 13 percent to $99.6
million, apparel revenues decreased five percent to $33.5 million and
equipment improved 34 percent to $10.6 million. Pre-tax income grew 49
percent to $23.2 million.
Other Revenues
______________
Other revenues, which include Converse Inc., NIKE Golf, Bauer NIKE
Hockey Inc., Cole Haan, Hurley International LLC and Exeter Brands
Group LLC, grew 20 percent to $389.6 million from $325.1 million last
year. Pre-tax income increased 724 percent to $23.9 million.
Income Statement Review
Gross margins were 44.1 percent compared to 42.1 percent last year.
Selling and administrative expenses were 31.3 percent of third quarter
revenues, compared to 30.7 percent last year. The effective tax rate
for the third quarter was 33.9 percent.
Balance Sheet Review
At quarter end, global inventories stood at $1.7 billion, an increase
of four percent from February 29, 2004. Cash and short-term
investments were $1.6 billion at the end of the quarter, compared to
$914.7 million last year.
Share Repurchase
During the quarter, the Company purchased a total of 2,302,000 shares
for approximately $199.8 million in conjunction with the Company's
four-year, $1.5 billion share repurchase program that was approved by
the Board of Directors in June 2004. To date, the Company has
repurchased a total of 5,070,900 shares under this program.
NIKE, Inc. based in Beaverton, Oregon is the world's leading designer,
marketer and distributor of authentic athletic footwear, apparel,
equipment and accessories for a wide variety of sports and fitness
activities. Wholly owned Nike subsidiaries include Converse Inc., which
designs, markets and distributes athletic footwear, apparel and
accessories; Bauer NIKE Hockey Inc., a leading designer and distributor
of hockey equipment; Cole Haan, a leading designer and marketer of
luxury shoes, handbags, accessories and coats; Hurley International LLC,
which designs, markets and distributes action sports and youth
lifestyle footwear, apparel and accessories and Exeter Brands Group LLC,
which designs and markets athletic footwear and apparel for the value
retail channel.
NIKE's earnings releases and other financial information are available
on the Internet at www.NikeBiz.com/invest.
* The marked paragraphs contain forward-looking statements that involve
risks and uncertainties that could cause actual results to differ
materially. These risks and uncertainties are detailed from time to
time in reports filed by NIKE with the S.E.C., including Forms 8-K,
10-Q, and 10-K. Some forward-looking statements in this release
concern changes in futures orders that are not necessarily indicative
of changes in total revenues for subsequent periods due to the mix of
futures and "at once" orders, which may vary significantly from quarter
to quarter.
(Tables Follow)
NIKE, INC.
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE QUARTER ENDED FEBRUARY 28, 2005
(In millions, except per share data)
INCOME QUARTER ENDING YEAR-TO-DATE ENDING
STATEMENT 02/28/2005 02/29/2004 %Chg 02/28/2005 02/29/2004 %Chg
====================================================== ============================
Revenues $3,308.2 $2,904.0 14% $10,018.3 $8,766.0 14%
Cost of Sales 1,849.4 1,682.1 10% 5,585.6 5,043.0 11%
Gross Profit 1,458.8 1,221.9 19% 4,432.7 3,723.0 19%
44.1 % 42.1 % 44.2 % 42.5 %
SG&A 1,035.7 892.0 16% 3,082.5 2,664.1 16%
31.3 % 30.7 % 30.8 % 30.4 %
Interest Expense, net (0.1) 5.5 - 8.4 21.1 (60%)
Other 9.8 17.2 (43%) 19.9 55.3 (64%)
----------------------- ----------------------
Income before income taxes 413.4 307.2 35% 1,321.9 982.5 35%
Income Taxes 140.0 106.9 31% 459.8 341.9 34%
----------------------- ----------------------
33.9 % 34.8 % 34.8 % 34.8 %
Net Income $273.4 $200.3 36% $862.1 $640.6 35%
======================= ======================
Diluted EPS $1.01 $0.74 36% $3.18 $2.38 34%
======================= ======================
Basic EPS $1.04 $0.76 37% $3.28 $2.43 35%
======================= ======================
Weighted Average Common Shares Outstanding:
Diluted 271.7 271.1 270.9 269.3
Basic 263.3 263.5 263.1 263.2
======================= =======================
Dividend Declared $0.25 $0.20 $0.70 $0.54
======================= =======================
NIKE, Inc.
BALANCE SHEET* 02/28/2005 02/29/2004
==================================================
ASSETS
Cash & Equivalents $1,222.5 $914.7
Short-term Investments 418.3 --
Accounts Receivable 2,304.9 2,017.9
Inventory 1,727.0 1,667.6
Deferred Taxes 170.5 218.5
Prepaid Expenses and
Other Current Assets 355.5 435.6
Current Assets 6,198.7 5,254.3
Fixed Assets 3,305.5 3,213.4
Depreciation 1,680.0 1,576.5
Net Fixed Assets 1,625.5 1,636.9
Identifiable Intangible
Assets and Goodwill 538.6 500.7
Other Assets 289.3 292.6
------------------------
Total Assets $8,652.1 $7,684.5
========================
LIAB AND EQUITY
Current Long-Term Debt $6.4 $6.2
Payable to Banks 101.3 165.2
Accounts Payable 684.2 567.0
Accrued Liabilities 1,091.4 1,024.0
Income Taxes Payable 182.7 194.1
Current Liabilities 2,066.0 1,956.5
Long-term Debt 691.4 694.3
Def Inc Taxes & Oth Liab 467.3 470.2
Preferred Stock 0.3 0.3
Common Equity 5,427.1 4,563.2
------------------------
Total Liab. & Equity $8,652.1 $7,684.5
========================
*Certain prior year amounts have been reclassified to conform to fiscal year
2005 presentation. These changes had no impact on previously reported
results of operations or shareholders' equity.
NIKE, INC QUARTER ENDING YEAR-TO-DATE ENDING
Divisional Revenues* 02/28/2005 02/29/2004 %Chg 02/28/2005 02/29/2004 %Chg
===================================================== ============================
U.S. Region
Footwear $849.6 $772.8 10% $2,451.0 $2,219.2 10%
Apparel 345.8 329.3 5% 1,121.8 1,074.1 4%
Equipment 72.8 64.9 12% 229.1 205.7 11%
---------------------- ----------------------
Total 1,268.2 1,167.0 9% 3,801.9 3,499.0 9%
EMEA Region
Footwear 615.3 537.7 14% 1,810.4 1,600.2 13%
Apparel 351.3 284.1 24% 1,131.0 950.9 19%
Equipment 67.3 56.8 18% 211.5 186.9 13%
---------------------- ----------------------
Total 1,033.9 878.6 18% 3,152.9 2,738.0 15%
Asia Pacific Region
Footwear 237.9 214.2 11% 693.1 622.6 11%
Apparel 188.3 150.1 25% 544.9 437.9 24%
Equipment 46.6 37.9 23% 124.3 101.7 22%
---------------------- ----------------------
Total 472.8 402.2 18% 1,362.3 1,162.2 17%
Americas Region
Footwear 99.6 88.0 13% 344.2 294.5 17%
Apparel 33.5 35.2 (5%) 115.9 115.1 1%
Equipment 10.6 7.9 34% 34.6 26.9 29%
---------------------- ----------------------
Total 143.7 131.1 10% 494.7 436.5 13%
2,918.6 2,578.9 13% 8,811.8 7,835.7 12%
Other 389.6 325.1 20% 1,206.5 930.3 30%
Total NIKE Inc. Revenues $3,308.2 $2,904.0 14% $10,018.3 $8,766.0 14%
*Certain prior year amounts have been reclassified to conform to fiscal
year 2005 presentation. These changes had no impact on previously
reported results of operations or shareholders' equity.
NIKE, INC
QUARTER ENDING YEAR-TO-DATE ENDING
Pre-tax Income1 02/28/05 02/29/04* %Chg 02/28/05 02/29/04* %Chg
===================================================================================
U.S. Region $ 259.5 $ 236.2 10% $ 814.0 $ 722.0 13%
EMEA Region 219.3 171.4 28% 663.3 512.4 29%
Asia Pacific Region 100.4 86.7 16% 275.8 261.2 6%
Americas Region 23.2 15.6 49% 88.4 71.1 24%
Other 23.9 2.9 724% 85.0 5.3 1504%
Corporate2 (212.9) (205.6) (4%) (604.6) (589.5) (3%)
______________________ _____________________
Total Pre-tax Income1 $ 413.4 $ 307.2 35% $1,321.9 $ 982.5 35%
====================== =====================
_____________________
1 The Company evaluates performance of individual operating segments
based on pre-tax income. Total pre-tax income equals Income before
income taxes as shown on the Consolidated Income Statement.
2 "Corporate" represents items necessary to reconcile to total pre-tax
income, which includes corporate costs that are not allocated to the
operating segments for management reporting and intercompany
eliminations for specific items in the Consolidated Income Statement.
*Certain prior year amounts have been reclassified to conform to fiscal
year 2005 presentation. These changes had no impact on previously
reported results of operations or shareholders' equity.