EXHIBIT 99
FOR IMMEDIATE RELEASE
NIKE, INC. REPORTS SECOND QUARTER EARNINGS PER SHARE OF $0.71
Revenue up 14 percent, worldwide futures orders up 13 percent
BEAVERTON, Ore. (19 December, 2007) - NIKE, Inc. (NYSE:NKE) today reported
financial results for the second quarter ended November 30, 2007. For the
quarter, revenue grew 14 percent to $4.3 billion, compared to $3.8 billion
for the same period last year. Changes in currency exchange rates
increased revenue growth by 4 percentage points for the quarter. Second
quarter net income grew 10 percent to $359.4 million, compared to $325.6
million in the prior year and diluted earnings per share increased 11
percent to $0.71, versus $0.64 last year.
Mark Parker, Nike, Inc. President and Chief Executive Officer, said, "Our
second quarter was another great one, and it illustrates the ability of
our portfolio to deliver consistent, profitable growth. Our strategy for
continued growth is very clear - commit totally to the consumer, deliver
innovative and relevant product, and focus our execution and discipline on
those parts of the business that offer the greatest growth opportunity."*
Futures Orders
The Company reported worldwide futures orders for athletic footwear and
apparel, scheduled for delivery from December 2007 through April 2008,
totaling $6.5 billion, 13 percent higher than such orders reported for the
same period last year. Changes in currency exchange rates increased
reported orders growth by 3 percentage points.*
By region, futures orders for the U.S. increased 1 percent; Europe (which
includes the Middle East and Africa) increased 19 percent; Asia Pacific
grew 24 percent; and the Americas increased 21 percent. Changes in
currency exchange rates increased reported futures orders growth in Europe
by 6 percentage points and by 4 percentage points in Asia Pacific and in
the Americas.*
Regional Highlights
U.S.
____
During the second quarter, U.S. revenues increased 7 percent to $1.5
billion versus $1.4 billion for the second quarter of fiscal 2007. U.S.
athletic footwear revenues increased 12 percent to $983.3 million; apparel
revenues decreased 3 percent to $461.4 million; and equipment revenues
increased 9 percent to $68.7 million. U.S. pre-tax income increased 9
percent to $306.6 million from $282.1 million a year ago.
Europe
______
Second quarter revenues for the European region grew 18 percent to $1.2
billion from $1.0 billion for the same period last year. Changes in
currency exchange rates increased revenue growth by 10 percentage points.
Footwear revenues were up 19 percent to $646.7 million. Apparel revenues
increased 15 percent to $485.9 million and equipment revenues increased 24
percent to $91.6 million. Pre-tax income increased 37 percent to $230.2
million.
Asia Pacific
____________
In the second quarter, revenues in the Asia Pacific region grew 17 percent
to $674.6 million compared to $578.2 million a year ago. Changes in
currency exchange rates increased revenue growth by 5 percentage points.
Footwear revenues were up 20 percent to $334.1 million, apparel revenues
increased 15 percent to $289.2 million and equipment revenues grew 2
percent to $51.3 million. Pre-tax income increased 19 percent to $174.1
million.
Americas
________
Revenues in the Americas region increased 19 percent to $313.6 million
from $262.5 million in the second quarter of fiscal 2007. Currency
exchange rates contributed 5 percentage points to this growth rate.
Footwear revenues were up 16 percent to $214.3 million, apparel revenues
increased 31 percent to $73.2 million and equipment revenues grew 20
percent to $26.1 million. Pre-tax income was up 12 percent to $68.7
million.
Other Businesses
________________
For the first quarter, Other business revenues, which include Converse
Inc., NIKE Golf, Cole Haan Holdings Incorporated, NIKE Bauer Hockey Corp.,
Hurley International LLC and Exeter Brands Group LLC, grew 16 percent to
$613.7 million from $526.8 million last year. Pre-tax income increased 31
percent to $70.8 million for the quarter.
Following a strategic review of the Company's affiliate brands portfolio,
Nike management determined that Nike Bauer Hockey and the Starter brand
did not align with the Company's long-term growth priorities. On November
15, 2007, the Company announced it had reached a definitive agreement to
sell the Starter brand to Iconix Brand Group for $60 million in cash. This
transaction was completed on December 17, 2007. The Company is still
exploring the sale of the Bauer Hockey business.
On October 23, 2007, the Company announced it had reached an agreement on
an all-cash offer to acquire all of the outstanding share capital of Umbro
plc at 193.06 pence a share, which values the company at
(pound sterling) 282 million or approximately $570 million.
The acquisition will significantly expand Nike's global leadership in
football, a key growth category for the Company.
Commenting on these developments, Parker said: "Our focus on prime growth
opportunities extends throughout our portfolio of brands. We are confident
that our divestiture decisions this quarter are the right ones for Bauer
Hockey, for Starter, and for Nike. As for Umbro, it is a brand that has
tremendous heritage and respect in global football. We're very excited
about leveraging those connections and bringing them to life in new ways
that will reward consumers and strengthen our competitive stance in
football around the world."*
Income Statement Review
Gross margins were 44.3 percent compared to 43.4 percent for the same
period last year.
Selling and administrative expenses were 32.9 percent of second quarter
revenues, compared to 32.0 percent last year.
The effective tax rate for the second quarter was 30.3 percent. This was a
higher rate than last year's second quarter tax rate of 27.2 percent,
which included a retroactive benefit from an international tax agreement.
Balance Sheet Review
At quarter end, global inventories stood at $2.2 billion, an increase of 3
percent from November 30, 2006. Cash and short-term investments were $3.1
billion at the end of the quarter, compared to $1.9 billion last year.
Share Repurchase
During the second quarter, the Company purchased a total of 4,807,300
shares for approximately $292.8 million in conjunction with the Company's
four-year $3 billion share repurchase program approved by the Board of
Directors in June 2006. As of the end of the second quarter the Company
has repurchased a total of 28.6 million shares for approximately $1.4
billion under this program.
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 Converse Inc., which designs, markets and
distributes athletic footwear, apparel and accessories; Cole Haan Holdings
Incorporated, which designs, markets and distributes luxury shoes, handbags,
accessories and coats; NIKE Bauer Hockey Corp., a leading designer and
distributor of hockey equipment; 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/investors.
* 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 NOVEMBER 30, 2007
(In millions, except per share data)
INCOME QUARTER ENDED YEAR TO DATE ENDED
STATEMENT 11/30/2007 11/30/2006 %Chg 11/30/2007 11/30/2006 %Chg
======================================================= ============================
Revenues $4,339.5 $3,821.7 14% $8,994.6 $8,015.8 12%
Cost of sales 2,418.4 2,164.6 12% 4,986.5 4,509.5 11%
_______________________ ______________________
Gross margin 1,921.1 1,657.1 16% 4,008.1 3,506.3 14%
44.3 % 43.4 % 44.6 % 43.7 %
Selling and administrative
expense 1,429.5 1,223.7 17% 2,864.2 2,513.4 14%
32.9 % 32.0 % 31.8 % 31.4 %
Interest income, net 23.1 14.1 64% 47.7 27.2 75%
Other income (expense), net 0.9 (0.2) 550% (5.7) 3.0 -290%
----------------------- ----------------------
Income before income taxes 515.6 447.3 15% 1,185.9 1,023.1 16%
Income taxes 156.2 121.7 28% 256.8 320.3 -20%
----------------------- ----------------------
30.3 % 27.2 % 21.7 % 31.3 %
Net income $359.4 $325.6 10% $929.1 $702.8 32%
========================= ======================
Diluted EPS $0.71 $0.64 11% $1.83 $1.38 33%
======================= ======================
Basic EPS1 $0.72 $0.65 11% $1.86 $1.40 33%
======================= ======================
Weighted Average Common Shares Outstanding:
Diluted 506.2 507.3 506.8 508.8
Basic 497.6 502.4 498.5 503.9
======================= =======================
Dividends declared $0.23 $0.185 $0.415 $0.34
======================= =======================
1 Basic earnings per common share for the six months ended November 30, 2006
do not recalculate due to rounding.
NIKE, Inc.
BALANCE SHEET* 11/30/2007 11/30/2006
=========================================================================
(in millions)
ASSETS
Current assets:
Cash and equivalents $2,470.5 $1,102.9
Short-term investments 601.0 804.4
Accounts receivable, net 2,617.1 2,375.9
Inventories 2,223.7 2,167.2
Deferred income taxes 253.9 186.2
Prepaid expenses and other
current assets 521.2 561.3
------------------------
Total current assets 8,687.4 7,197.9
Property, plant and equipment 3,907.8 3,548.4
Less accumulated depreciation 2,119.7 1,875.4
------------------------
Property, plant and equipment, net 1,788.1 1,673.0
Identifiable intangible assets, net 409.7 406.7
Goodwill 130.8 130.8
Deferred income taxes and other assets 438.6 413.8
------------------------
Total assets $11,454.6 $9,822.2
========================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 6.1 $ 30.6
Notes payable 119.5 59.2
Accounts payable 1,053.5 880.3
Accrued liabilities 1,501.4 1,239.1
Income taxes payable 108.4 71.0
------------------------
Total current liabilities 2,788.9 2,280.2
Long-term debt 436.3 383.5
Deferred income taxes and other liabilities 736.9 620.1
Redeemable preferred stock 0.3 0.3
Shareholders' equity 7,492.2 6,538.1
------------------------
Total liabilities and shareholders' equity $11,454.6 $9,822.2
========================
*Certain prior year amounts have been reclassified to conform to fiscal year
2008 presentation. These changes had no impact on previously reported
results of operations or shareholders' equity.
NIKE, INC QUARTER ENDED YEAR TO DATE ENDED
DIVISIONAL REVENUES 11/30/2007 11/30/2006 %Chg 11/30/2007 11/30/2006 %Chg
===================================================== ============================
(in millions)
U.S. Region
Footwear $983.3 $879.4 12% $2,103.2 $1,958.5 7%
Apparel 461.4 475.4 -3% 889.4 906.9 -2%
Equipment 68.7 63.2 9% 159.2 154.5 3%
---------------------- ----------------------
Total 1,513.4 1,418.0 7% 3,151.8 3,019.9 4%
EMEA Region
Footwear 646.7 541.4 19% 1,438.6 1,220.9 18%
Apparel 485.9 421.0 15% 1,052.9 908.0 16%
Equipment 91.6 73.8 24% 210.4 178.2 18%
---------------------- ----------------------
Total 1,224.2 1,036.2 18% 2,701.9 2,307.1 17%
Asia Pacific Region
Footwear 334.1 277.4 20% 666.2 543.4 23%
Apparel 289.2 250.6 15% 529.7 451.5 17%
Equipment 51.3 50.2 2% 109.5 101.7 8%
---------------------- ----------------------
Total 674.6 578.2 17% 1,305.4 1,096.6 19%
Americas Region
Footwear 214.3 185.1 16% 412.7 357.4 15%
Apparel 73.2 55.7 31% 131.5 106.9 23%
Equipment 26.1 21.7 20% 48.9 40.7 20%
---------------------- ----------------------
Total 313.6 262.5 19% 593.1 505.0 17%
3,725.8 3,294.9 13% 7,752.2 6,928.6 12%
Other 613.7 526.8 16% 1,242.4 1,087.2 14%
Total NIKE, Inc. revenues $4,339.5 $3,821.7 14% $8,994.6 $8,015.8 12%
NIKE, INC
QUARTER ENDED YEAR TO DATE ENDED
PRE-TAX INCOME1,2 11/30/07 11/30/06 %Chg 11/30/07 11/30/06 %Chg
===================================================================================
U.S. Region $ 306.6 $ 282.1 9% $ 653.9 $ 637.8 3%
EMEA Region 230.2 167.7 37% 605.7 478.3 27%
Asia Pacific Region 174.1 145.8 19% 333.6 250.7 33%
Americas Region 68.7 61.1 12% 126.6 110.8 14%
Other 70.8 54.1 31% 166.0 141.5 17%
Corporate3 (334.8) (263.5) -27% (699.9) (596.0) -17%
______________________ _____________________
Total pre-tax income1 $ 515.6 $ 447.3 15% $1,185.9 $1,023.1 16%
====================== =====================
_____________________
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 Certain prior year amounts have been reclassified to conform to fiscal
year 2008 presentation. These changes had no impact on previously
reported results of operations or shareholders' equity.
3 "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.