EXHIBIT 99
FOR IMMEDIATE RELEASE
NIKE, INC. REPORTS THIRD QUARTER EARNINGS PER SHARE OF $1.37
Revenue up 9 percent
Worldwide futures orders up 9 percent
BEAVERTON, Ore. (22 March, 2007) - NIKE, Inc. (NYSE:NKE) today reported
financial results for the third quarter ended February 28, 2007. For the
quarter, revenue grew 9 percent to $3.9 billion, compared to $3.6 billion for
the same period last year. Changes in currency exchange rates increased revenue
growth by 3 percentage points for the quarter. Third quarter net income grew 8
percent to $350.8 million, compared to $325.8 million in the prior year and
diluted earnings per share increased 10 percent to $1.37, versus $1.24 last
year.
"We had a strong third quarter. Our mix of compelling product and premium
consumer experiences drove a meaningful acceleration of futures orders," said
Mark Parker, Nike, Inc. president and chief executive officer. "We continue to
grow because we're innovative, disciplined, and connected to our consumers."*
Futures Orders
The Company reported worldwide futures orders for athletic footwear and
apparel, scheduled for delivery from March 2007 through July 2007, totaling
$6.0 billion, 9 percent higher than such orders reported for the same period
last year. Changes in currency exchange rates increased reported orders growth
by 1 percentage point.*
By region, futures orders for the U.S. increased 8 percent; Europe (which
includes the Middle East and Africa) increased 9 percent; Asia Pacific grew 14
percent; and the Americas increased 2 percent. Changes in currency exchange
rates increased the reported futures orders growth in Europe and Asia Pacific
by 2 percentage points; and in the Americas region decreased reported futures
growth by 1 percentage point.*
Regional Highlights
U.S.
____
During the third quarter, U.S. revenues increased 2 percent to $1.5 billion
versus $1.4 billion for the third quarter of fiscal 2006. U.S. athletic
footwear revenues increased 2 percent to $1.0 billion, apparel revenues
increased 1 percent to $371.3 million and equipment revenues increased 11
percent to $77.8 million. U.S. pre-tax income decreased 2 percent to $280.2
million from $286.2 million a year ago.
Europe
______
Third quarter revenues for the European region grew 15 percent to $1.1 billion
from $980.1 million for the same period last year. Changes in currency
exchange rates increased revenue growth by 9 percentage points. Footwear
revenues increased 12 percent to $630.0 million, apparel revenues increased 19
percent to $413.2 million and equipment revenues increased 18 percent to $81.6
million. Pre-tax income increased 18 percent to $246.5 million.
Asia Pacific
____________
In the third quarter revenues in the Asia Pacific region grew 11 percent to
$589.9 million compared to $532.3 million a year ago. Changes in currency
exchange rates increased revenue by 3 percentage points. Footwear revenues
increased 12 percent to $319.4 million, apparel revenues increased 9 percent
to $217.4 million and equipment revenues grew 8 percent to $53.1 million. Pre-
tax income increased 6 percent to $126.4 million.
Americas
________
Revenues in the Americas region increased 5 percent to $212.5 million compared
to $203.1 million in the third quarter of fiscal 2006. Changes in currency
exchange rates did not have a significant impact on revenue growth. Footwear
revenues were up 6 percent to $152.8 million, apparel revenues declined 5
percent to $42.3 million and equipment revenues grew 16 percent to $17.4
million. Pre-tax income was up 6 percent to $40.7 million.
Other Businesses
________________
For the third quarter, Other business revenues, which are comprised of results
from Cole Haan Holdings Incorporated, Converse Inc., Exeter Brands Group LLC,
Hurley International LLC, NIKE Bauer Hockey Inc., and NIKE Golf grew 15 percent
to $522.7 million from $454.5 million last year. Pre-tax income increased 53
percent to $68.4 million for the quarter.
Income Statement Review
Gross margins were 44.2 percent during the third quarter compared to 43.6
percent for the same period in the prior year.
Selling and administrative expenses were 31.7 percent of third quarter
revenues, compared to 30.1 percent last year. Results for the third quarter
included $17.8 million, net of taxes, related to the expensing of stock
options, which reduced diluted earnings per share by $0.07. Excluding stock
option expense third quarter net income increased 13 percent and diluted
earnings per share increased 16 percent to $1.44.
The effective tax rate for the third quarter declined to 32.3 percent mainly
due to a new European tax agreement, which was finalized in the second quarter
of fiscal 2007 and the retroactive reinstatement of the U.S. research and
development tax credit signed into law in December.
Balance Sheet Review
At quarter end, global inventories stood at $2.2 billion, an increase of 7
percent from February 28, 2006. Cash and short-term investments were $2.3
billion at the end of the quarter, compared to $2.0 billion last year.
Share Repurchase
During the third quarter, the Company purchased a total of 906,700 shares for
approximately $91 million in conjunction with the Company's four-year $3
billion share repurchase program approved by the Board of Directors in June
2006.
Stock Split
On February 15, 2007 the Board declared a two-for-one stock split of the
Company's Class A and Class B common stock to be effected in the form of a
100% common stock dividend. All shareholders of record at the close of
business on March 12, 2007 will receive one additional share of common stock
for each share held on that date. The additional share of common stock will
be distributed on April 2, 2007. Information pertaining to shares and earnings
per share does not reflect this split. Information reflecting the stock split
will be presented after the stock dividend is distributed.
MEDIA CONTACT: INVESTOR CONTACT:
Alan Marks Pamela Catlett
503.671.4235 503.671.4589
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 Cole Haan Holdings Incorporated, a leading
designer and marketer of luxury shoes, handbags, accessories and coats;
Converse Inc., which designs, markets and distributes athletic footwear,
apparel and accessories; Exeter Brands Group LLC, which designs and markets
athletic footwear and apparel for the value retail channel; Hurley
International LLC, which designs, markets and distributes action sports
and youth lifestyle footwear, apparel and accessories and NIKE Bauer
Hockey Inc., a leading designer and distributor of hockey equipment.
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 PERIOD ENDED FEBRUARY 28, 2007
(In millions, except per share data)
QUARTER ENDED YEAR TO DATE ENDED
INCOME STATEMENT 2/28/2007 2/28/2006 %Chg 2/28/2007 2/28/2006 %Chg
======================================================= ============================
Revenues $3,926.9 $3,612.8 9% $11,942.7 $10,949.5 9%
Cost of sales 2,191.7 2,038.7 8% 6,701.2 6,115.9 10%
_______________________ ______________________
Gross margin 1,735.2 1,574.1 10% 5,241.5 4,833.6 8%
44.2 % 43.6 % 43.9 % 44.1 %
Selling and administrative
expense 1,243.3 1,086.6 14% 3,756.7 3,245.7 16%
31.7 % 30.1 % 31.5 % 29.6 %
Interest income, net (15.8) (8.4) 88% (43.0) (20.5) 110%
Other income, net (10.3) (10.7) -4% (13.3) (22.0) -40%
----------------------- ----------------------
Income before income taxes 518.0 506.6 2% 1,541.1 1,630.4 -5%
Income taxes 167.2 180.8 -8% 487.5 571.2 -15%
----------------------- ----------------------
32.3 % 35.7 % 31.6 % 35.0 %
Net income $350.8 $325.8 8% $1,053.6 $1,059.2 -1%
========================= ======================
Diluted EPS $1.37 $1.24 10% $4.14 $4.00 4%
======================= ======================
Basic EPS $1.39 $1.26 10% $4.18 $4.08 2%
======================= ======================
Weighted Average Common Shares Outstanding:
Diluted 255.4 263.4 254.8 264.6
Basic 252.3 258.9 252.1 259.6
======================= =======================
Dividends declared $0.37 $0.31 $1.05 $0.87
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NIKE, INC.
BALANCE SHEET 2/28/2007 2/28/2006
=========================================================================
(In millions)
ASSETS
Current assets:
Cash and equivalents $1,879.2 $1,472.1
Short-term investments 390.5 535.0
Accounts receivable, net 2,532.0 2,351.6
Inventories 2,167.8 2,034.2
Deferred income taxes 184.4 115.0
Prepaid expenses and other
current assets 486.2 536.8
Total current assets 7,640.1 7,044.7
Property, plan and equipment 3,568.9 3,283.2
Less accumulated depreciation 1,914.3 1,684.8
Property, plant and equipment, net 1,654.6 1,598.4
Identifiable intangible assets, net 406.1 406.2
Goodwill 130.8 135.3
Deferred income taxes and other assets 387.0 333.6
------------------------
Total assets $10,218.6 $9,518.2
========================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 30.6 $254.7
Notes payable 96.0 79.3
Accounts payable 800.9 785.8
Accrued liabilities 1,310.5 1,128.9
Income taxes payable 74.7 55.5
Total current liabilities 2,312.7 2,304.2
Long-term debt 419.4 411.3
Deferred income taxes and other liabilities 638.2 540.8
Redeemable preferred stock 0.3 0.3
Shareholders' equity 6,848.0 6,261.6
------------------------
Total liabilities and shareholders' equity $10,218.6 $9,518.2
========================
NIKE, INC. QUARTER ENDED YEAR TO DATE ENDED
DIVISIONAL REVENUES 2/28/2007 2/28/2006 %Chg 2/28/2007 2/28/2006 %Chg
===================================================== ============================
(In millions)
U.S. Region
Footwear $1,027.9 $1,005.9 2% $2,986.4 $2,838.5 5%
Apparel 371.3 366.6 1% 1,278.2 1,195.9 7%
Equipment 77.8 70.3 11% 232.3 224.4 4%
---------------------- ----------------------
Total 1,477.0 1,442.8 2% 4,496.9 4,258.8 6%
EMEA Region
Footwear 630.0 563.8 12% 1,850.9 1,782.1 4%
Apparel 413.2 347.1 19% 1,321.2 1,161.9 14%
Equipment 81.6 69.2 18% 259.8 231.0 12%
---------------------- ----------------------
Total 1,124.8 980.1 15% 3,431.9 3,175.0 8%
Asia Pacific Region
Footwear 319.4 284.1 12% 862.8 766.9 13%
Apparel 217.4 199.0 9% 668.9 590.1 13%
Equipment 53.1 49.2 8% 154.8 138.2 12%
---------------------- ----------------------
Total 589.9 532.3 11% 1,686.5 1,495.2 13%
Americas Region
Footwear 152.8 143.7 6% 510.2 478.7 7%
Apparel 42.3 44.4 -5% 149.2 140.5 6%
Equipment 17.4 15.0 16% 58.1 49.7 17%
---------------------- ----------------------
Total 212.5 203.1 5% 717.5 668.9 7%
3,404.2 3,158.3 8% 10,332.8 9,597.9 8%
Other 522.7 454.5 15% 1,609.9 1,351.6 19%
Total NIKE, Inc. revenues $3,926.9 $3,612.8 9% $11,942.7 $10,949.5 9%
NIKE, INC.
QUARTER ENDED YEAR TO DATE ENDED
PRE-TAX INCOME1,* 2/28/2007 2/28/2006 %Chg 2/28/2007 2/28/2006 %Chg
===================================================================================
(In millions)
U.S. Region $ 280.2 $ 286.2 -2% $ 885.1 $ 897.1 -1%
EMEA Region 246.5 208.7 18% 707.8 733.1 -3%
Asia Pacific Region 126.4 119.6 6% 365.2 326.2 12%
Americas Region 40.7 38.5 6% 148.9 140.5 6%
Other 68.4 44.6 53% 210.6 107.6 96%
Corporate2 (244.2) (191.0) -28% (776.5) (574.1) -35%
______________________ _____________________
Total pre-tax income1 $ 518.0 $ 506.6 2% $1,541.1 $1,630.4 -5%
====================== =====================
_____________________
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 2007 presentation. These changes had no impact on previously
reported results of operations or shareholders' equity.
NIKE, INC
NET INCOME AND DILUTED QUARTER ENDED YEAR TO DATE ENDED
EPS RECONCILIATION1 2/28/2007 2/28/2006 %Chg 2/28/2007 2/28/2006 %Chg
===================================================================================
(In millions, except per share data)
Net income, as reported $ 350.8 $ 325.8 8% $1,053.6 $1,059.2 -1%
Exclude: Stock-based compensation
expense, net of tax2 17.8 -- 78.1 --
______________________ ______________________
Net income, excluding stock-based
compensation expense2 $ 368.6 $ 325.8 13% $1,131.7 $1,059.2 7%
======================= ======================
Diluted EPS, as reported $ 1.37 $ 1.24 10% $ 4.14 $ 4.00 4%
Diluted EPS, excluding
stock-based compensation
expense2 $ 1.44 $ 1.24 16% $ 4.44 $ 4.00 11%
_____________________
1 This schedule is intended to satisfy the quantitative reconciliation for
non-GAAP financial measures in accordance with Regulation G of the Securities
and Exchange Commission.
2 This charge relates to stock compensation expensed in accordance with stock
options and ESPP shares issued to employees and expensed in accordance with
SFAS 123(R) "Share Based Payment", which was adopted by the Company during
its first fiscal quarter ended August 31, 2006.