EXHIBIT 99
FOR IMMEDIATE RELEASE
MEDIA CONTACT: INVESTOR CONTACT:
Alan Marks Pamela Catlett
503.671.4235 503.671.4589
NIKE REPORTS SECOND QUARTER EARNINGS PER SHARE OF $1.24,
UP 23 PERCENT FROM PRIOR YEAR
Worldwide futures orders up 2.9 percent, up 5.4 percent
excluding effects of foreign currency
Beaverton, OR (March 21, 2006) - NIKE, Inc. (NYSE:NKE) today reported
record results for the third quarter ended February 28, 2006. Third
quarter revenues increased nine percent to $3.6 billion, compared to
$3.3 billion for the same period last year. Changes in currency
exchange rates reduced revenue growth by three percentage points. Net
income grew 19 percent to $325.8 million, compared to $273.4 million in
the prior year. Diluted earnings per share grew 23 percent to $1.24,
versus $1.01 last year.
"We're very pleased with the performance of the Nike brand and our Nike
Inc. portfolio, both for the quarter and year to date," said Mark Parker,
President and Chief Executive Officer, Nike, Inc. "The strength of our
product pipeline, brand portfolio and global reach is enabling us to
balance continued challenges in markets such as Western Europe and Japan
with strong momentum in other key markets and regions. This, combined
with our ability to manage expenses, enabled us to deliver on our long-
term goal of sustainable, profitable growth." *
Futures Orders
The Company reported worldwide futures orders for athletic footwear and
apparel, scheduled for delivery from March 2006 through July 2006,
totaling $5.4 billion, 2.9 percent higher than such orders reported for
the same period last year. Changes in currency exchange rates reduced
this growth, as global futures orders grew by 5.4 percent excluding the
impact of currency changes.*
By region, futures orders for the U.S. increased six percent; Europe
(which includes the Middle East and Africa) declined two percent; Asia
Pacific grew five percent; and the Americas increased ten percent.
Changes in currency exchange rates reduced the reported futures orders
by five percentage points in Europe and by four percentage points in the
Asia Pacific region. In the Americas region, two percentage points of
the increase were due to changes in currency exchange rates.*
Regional Highlights
U.S.
____
During the third quarter, U.S. revenues increased 14 percent to $1.4
billion versus $1.3 billion for the third quarter of fiscal 2005. U.S.
athletic footwear revenues increased 18 percent to $1.0 billion.
Apparel revenues increased six percent to $366.6 million. Equipment
revenues declined three percent to $70.3 million. U.S. pre-tax income
improved ten percent to $286.2 million.
Europe
______
Revenues for the European region declined five percent to $980.1 million
from $1.0 billion for the same period last year. Changes in currency
exchange rates reduced revenue growth by nine percentage points.
Footwear revenues were $563.8 million, down eight percent from $615.3
million a year ago. Apparel revenues decreased by one percent to $347.1
million and equipment revenues increased three percent to $69.2 million.
Pre-tax income declined five percent to $208.7 million.
Asia Pacific
____________
Third quarter revenues for the Asia Pacific region grew 13 percent to
$532.3 million compared to $472.8 million a year ago. Changes in
currency exchange rates reduced revenue growth by four percentage points.
Footwear revenues were up 19 percent to $284.1 million, apparel revenues
increased six percent to $199.0 million and equipment revenues grew six
percent to $49.2 million. Pre-tax income increased 19 percent to $119.6
million.
Americas
________
Revenues in the Americas region increased 41 percent to $203.1 million,
an improvement from $143.7 million in the third quarter of fiscal 2005.
Changes in currency exchange rates contributed 11 percentage points to
this growth rate. Footwear revenues were up 44 percent to $143.7
million, apparel revenues increased 33 percent to $44.4 million and
equipment jumped 42 percent to $15.0 million. Pre-tax income was up 69
percent to $38.5 million.
Other Businesses
________________
Third quarter Other business revenues, which include Converse Inc., NIKE
Golf, NIKE Bauer Hockey Inc., Cole Haan, Hurley International LLC and
Exeter Brands Group LLC, grew 17 percent to $454.5 million from $389.6
million last year. Pre-tax income was up 90 percent to $43.6 million.
Income Statement Review
Gross margins were 43.6 percent in the third quarter compared to 44.1
percent last year. Selling and administrative expenses were 30.1 percent
of third quarter revenues, compared to 31.3 percent last year. The
effective tax rate for the third quarter was 35.7 percent.
Balance Sheet Review
At quarter end, global inventories stood at $2.0 billion, an increase of
16 percent from February 28, 2005. Cash and short-term investments were
$2.0 billion at the end of the quarter, compared to $1.6 billion last
year.
Share Repurchase
During the quarter, the Company purchased a total of 1,494,000 shares
for approximately $128 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.
NIKE, Inc. based near 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; NIKE Bauer 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, exchange rate fluctuations, order cancellations and
discounts, which may vary significantly from quarter to quarter, and
because a significant portion of the business does not report futures
orders.
(Tables Follow)
NIKE, INC.
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE QUARTER ENDED FEBRUARY 28, 2006
(In millions, except per share data)
INCOME QUARTER ENDING YEAR-TO-DATE ENDING
STATEMENT 02/28/2006 02/28/2005 %Chg 02/28/2006 02/28/2005 %Chg
====================================================== ============================
Revenues $3,612.8 $3,308.2 9% $10,949.5 $10,018.3 9%
Cost of sales 2,038.7 1,849.4 10% 6,115.9 5,585.6 9%
_______________________ ______________________
Gross margin 1,574.1 1,458.8 8% 4,833.6 4,432.7 9%
43.6 % 44.1 % 44.1 % 44.2 %
Selling and administrative
expense 1,086.6 1,035.7 5% 3,245.7 3,082.5 5%
30.1 % 31.3 % 29.6 % 30.8 %
Interest (income) expense, net (8.4) (0.1) - (20.5) 8.4 -
Other (income) expense, net (10.7) 9.8 - (22.0) 19.9 -
----------------------- ----------------------
Income before income taxes 506.6 413.4 23% 1,630.4 1,321.9 23%
Income taxes 180.8 140.0 29% 571.2 459.8 24%
----------------------- ----------------------
35.7 % 33.9 % 35.0 % 34.8 %
Net income $325.8 $273.4 19% $ 1,059.2 $862.1 23%
======================= ======================
Diluted EPS $1.24 $1.01 23% $4.00 $3.18 26%
======================= ======================
Basic EPS $1.26 $1.04 21% $4.08 $3.28 24%
======================= ======================
Weighted Average Common Shares Outstanding:
Diluted 263.4 271.7 264.6 270.9
Basic 258.9 263.3 259.6 263.1
======================= =======================
Dividends declared $0.31 $0.25 $0.87 $0.70
======================= =======================
NIKE, INC.
BALANCE SHEET* 02/28/2006 02/28/2005
=========================================================================
ASSETS
Current assets:
Cash and equivalents $1,472.1 $1,222.5
Short-term investments 535.0 418.3
Accounts receivable, net 2,351.6 2,304.9
Inventories 2,034.2 1,746.8
Deferred income taxes 115.0 170.5
Prepaid expenses and other
current assets 536.8 355.5
Total Current Assets 7,044.7 6,218.5
Property, plant and equipment 3,283.2 3,302.9
Less accumulated depreciation 1,684.8 1,679.7
Property, plant and equipment, net 1,598.4 1,623.2
Identifiable intangible assets, net 406.2 403.2
Goodwill 135.3 135.4
Deferred income taxes and other assets 333.6 291.6
------------------------
Total Assets $9,518.2 $8,671.9
========================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $254.7 $6.4
Notes payable 79.3 101.3
Accounts payable 785.8 630.8
Accrued liabilities 1,128.9 1,164.6
Income taxes payable 55.5 182.7
Total Current Liabilities 2,304.2 2,085.8
Long-term debt 411.3 691.4
Deferred income taxes and other liabilities 540.8 467.3
Redeemable preferred stock 0.3 0.3
Shareholders' equity 6,261.6 5,427.1
------------------------
Total Liabilities and Shareholders' Equity $9,518.2 $8,671.9
========================
*Certain prior year amounts have been reclassified to conform to fiscal year
2006 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 02/28/2006 02/28/2005 %Chg 02/28/2006 02/28/2005 %Chg
===================================================== ============================
U.S. Region
Footwear $1,005.9 $849.6 18% $2,838.5 $2,451.0 16%
Apparel 366.6 345.8 6% 1,195.9 1,121.8 7%
Equipment 70.3 72.8 -3% 224.4 229.1 -2%
---------------------- ----------------------
Total 1,442.8 1,268.2 14% 4,258.8 3,801.9 12%
EMEA Region
Footwear 563.8 615.3 -8% 1,782.1 1,810.4 -2%
Apparel 347.1 351.3 -1% 1,161.9 1,131.0 3%
Equipment 69.2 67.3 3% 231.0 211.5 9%
---------------------- ----------------------
Total 980.1 1,033.9 -5% 3,175.0 3,152.9 1%
Asia Pacific Region
Footwear 284.1 237.9 19% 766.9 693.1 11%
Apparel 199.0 188.3 6% 590.1 544.9 8%
Equipment 49.2 46.6 6% 138.2 124.3 11%
---------------------- ----------------------
Total 532.3 472.8 13% 1,495.2 1,362.3 10%
Americas Region
Footwear 143.7 99.6 44% 478.7 344.2 39%
Apparel 44.4 33.5 33% 140.5 115.9 21%
Equipment 15.0 10.6 42% 49.7 34.6 44%
---------------------- ----------------------
Total 203.1 143.7 41% 668.9 494.7 35%
3,158.3 2,918.6 8% 9,597.9 8,811.8 9%
Other 454.5 389.6 17% 1,351.6 1,206.5 12%
Total NIKE, Inc. revenues $3,612.8 $3,308.2 9% $10,949.5 $10,018.3 9%
NIKE, INC
QUARTER ENDING YEAR-TO-DATE ENDING
Pre-tax Income1,* 02/28/2006 02/28/2005 %Chg 02/28/2006 02/28/2005 %Chg
===================================================================================
USA Region $ 286.2 $ 260.1 10% $ 897.1 $ 815.5 10%
EMEA Region 208.7 219.3 -5% 733.1 663.3 11%
Asia Pacific Region 119.6 100.4 19% 326.2 275.8 18%
Americas Region 38.5 22.8 69% 140.5 87.5 61%
Other 43.6 23.0 90% 106.6 84.0 27%
Corporate2 (190.0) (212.2) 10% (573.1) (604.2) 5%
______________________ _____________________
Total Pre-tax Income1 $ 506.6 $ 413.4 23% $1,630.4 $1,321.9 23%
====================== =====================
_____________________
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 2006 presentation. These changes had no impact on previously
reported results of operations or shareholders' equity.