EXHIBIT 99
NIKE INC. REPORTS THIRD QUARTER EARNINGS PER SHARE OF $0.92;
UP 35 PERCENT FROM PRIOR YEAR
Worldwide Futures Orders Up 11 Percent
BEAVERTON, Ore. (19 March, 2008) - NIKE, Inc. (NYSE:NKE) today reported
financial results for the third quarter ended February 29, 2008. For the
quarter, revenue grew 16 percent to $4.5 billion, compared to $3.9 billion
for the same period last year. Changes in currency exchange rates
increased revenue growth by 6 percentage points for the quarter. Third
quarter net income grew 32 percent to $463.8 million, compared to $350.8
million in the prior year and diluted earnings per share increased 35
percent to $0.92, versus $0.68 last year.
"A year ago we established the goal of reaching $23 billion in revenues by
our fiscal year 2011 and outlined our strategy for achieving that goal
while continuing to deliver profitable, sustainable growth and outstanding
returns to our shareholders," said Mark Parker, Nike, Inc. President and
Chief Executive Officer. "Our strong third quarter results, driven by
sales gains across our diversified portfolio of categories, geographies,
and brands, are a clear indication that our strategy is working and that
we're on track to achieve our financial goals for this fiscal year and
beyond."*
Parker continued, "Over the past twelve months we've taken a number of
important strategic steps to strengthen the performance and potential of
our portfolio of products and brands, steps we believe create stronger
platforms for growth and allow us to connect even deeper with consumers.
More than ever, the consumer is at the epicenter of everything we do and
delivering the most innovative products and the most exciting consumer
experiences is the key to our future growth."*
Futures Orders
The Company reported worldwide futures orders for athletic footwear and
apparel, scheduled for delivery from March 2008 through July 2008,
totaling $6.9 billion, 11 percent higher than such orders reported for the
same period last year. Changes in currency exchange rates increased
reported orders growth by 2 percentage points.*
By region, futures orders for the U.S. increased 1 percent; Europe (which
includes the Middle East and Africa) increased 12 percent; Asia Pacific
grew 32 percent; and the Americas increased 20 percent. Changes in
currency exchange rates increased reported futures orders growth in Europe
by 3 percentage points and by 7 percentage points in Asia Pacific. In the
Americas region changes in currency exchange rates did not have a
significant impact on futures growth.*
Regional Highlights
U.S.
____
During the third quarter, U.S. revenues increased 5 percent to $1.6
billion versus $1.5 billion for the third quarter of fiscal 2007. U.S.
athletic footwear revenues increased 5 percent to $1.1 billion; apparel
revenues increased 10 percent to $407.8 million; and equipment revenues
decreased 12 percent to $68.7 million. U.S. pre-tax income increased 17
percent to $347.3 million from $296.4 million a year ago.
Europe
______
Third quarter revenues for the Company's European region grew 23 percent
to $1.4 billion from $1.1 billion for the same period last year. Changes
in currency exchange rates increased revenue growth by 13 percentage
points. Footwear revenues were up 25 percent to $784.8 million. Apparel
revenues increased 21 percent to $499.5 million and equipment revenues
increased 23 percent to $100.0 million. Pre-tax income increased 31
percent to $334.3 million.
Asia Pacific
____________
In the third quarter, revenues in the Asia Pacific region grew 27 percent
to $748.3 million compared to $589.9 million a year ago. Changes in
currency exchange rates increased revenue growth by 7 percentage points.
Footwear revenues were up 29 percent to $411.3 million, apparel revenues
increased 25 percent to $272.6 million and equipment revenues grew 21
percent to $64.4 million. Pre-tax income increased 46 percent to $193.0
million.
Americas
________
Revenues in the Americas region increased 20 percent to $254.4 million
from $212.5 million in the third quarter of fiscal 2007. Currency exchange
rates contributed 10 percentage points to this growth rate. Footwear
revenues were up 16 percent to $177.9 million, apparel revenues increased
30 percent to $55.0 million and equipment revenues grew 24 percent to
$21.5 million. Pre-tax income increased 23 percent to $51.9 million.
Other Businesses
________________
For the third 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 15 percent to
$600.9 million from $522.7 million last year in the same period. Pre-tax
income increased 16 percent to $77.5 million for the quarter.
On December 17, 2007, the Company completed its sale of the Starter brand
to Iconix Brand Group, Inc. resulting in a gain of $29 million which is
included in third quarter other income.
On February 21, 2008, the Company announced it had reached a definitive
agreement to sell Bauer Hockey to an investor group led by Kohlberg &
Company and Canadian businessman W. Graeme Roustan for $200 million in
cash. This transaction is expected to be completed before the end of the
fiscal year.
On January 31, 2008, Nike's (pound sterling)285 million, all-cash offer for the
acquisition of 100 percent of the shares of Umbro plc was approved by
Umbro shareholders. The United Kingdom's Office of Fair Trade gave
regulatory approval on February 6, 2008 and on March 3, 2008 the
acquisition was completed by Nike's wholly-owned subsidiary, NIKE Vapor
Ltd.
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 are the right ones for Bauer Hockey,
Starter, and Nike. Our most recent acquisition, Umbro, is a brand that
has tremendous heritage and respect in global football. This acquisition
represents an opportunity to create value for shareholders and consumers
by applying our product, brand-building and operational capabilities to a
business with enormous growth potential around the world."*
Income Statement Review
Third quarter gross margins were 45.1 percent compared to 44.2 percent for
the same period last year. Selling and administrative expenses were 30.9
percent of third quarter revenues, compared to 31.7 percent last year. The
effective tax rate for the quarter was 30.6 percent compared to 32.3
percent for the same period last year.
Balance Sheet Review
At quarter end, global inventories stood at $2.4 billion, an increase of
10 percent from February 28, 2007. Cash and short-term investments were
$2.9 billion at the end of the quarter, compared to $2.3 billion last
year.
Share Repurchase
During the third quarter, the Company purchased a total of 5,570,300
shares for approximately $343.9 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 third quarter the Company has
repurchased a total of 34.2 million shares for approximately $1.8 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; Umbro Ltd., a leading United Kingdom-based global
football (soccer) brand; and Hurley International LLC, which designs, markets
and distributes action sports and youth lifestyle footwear, apparel and
accessories. 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 FEBRUARY 29, 2008
(In millions, except per share data)
INCOME QUARTER ENDED YEAR TO DATE ENDED
STATEMENT 02/29/2008 02/28/2007 %Chg 02/29/2008 02/28/2007 %Chg
======================================================= ============================
Revenues $4,544.4 $3,926.9 16% $13,539.0 $11,942.7 13%
Cost of sales 2,496.5 2,191.7 14% 7,483.0 6,701.2 12%
_______________________ ______________________
Gross margin 2,047.9 1,735.2 18% 6,056.0 5,241.5 16%
45.1 % 44.2 % 44.7 % 43.9 %
Selling and administrative
expense 1,403.2 1,243.3 13% 4,267.4 3,756.7 14%
30.9 % 31.7 % 31.5 % 31.5 %
Interest income, net 18.7 15.8 18% 66.4 43.0 54%
Other income (expense), net 5.3 10.3 -49% (0.4) 13.3 -103%
----------------------- ----------------------
Income before income taxes 668.7 518.0 29% 1,854.6 1,541.1 20%
Income taxes 204.9 167.2 23% 461.7 487.5 -5%
----------------------- ----------------------
30.6 % 32.3 % 24.9 % 31.6 %
Net income $463.8 $350.8 32% $1,392.9 $1,053.6 32%
======================= ======================
Diluted EPS1 $0.92 $0.68 35% $2.76 $2.07 33%
======================= ======================
Basic EPS1 $0.94 $0.69 36% $2.80 $2.09 34%
======================= ======================
Weighted Average Common Shares Outstanding:
Diluted 502.5 510.8 505.4 509.6
Basic 493.9 504.5 497.0 504.1
======================= =======================
Dividends declared $0.23 $0.185 $0.645 $0.525
======================= =======================
1 Basic earnings per common share for the three months ended February 28, 2007
do not recalculate due to rounding.
NIKE, INC.
BALANCE SHEET* 02/29/2008 02/28/2007
=========================================================================
(In millions)
ASSETS
Current assets:
Cash and equivalents $2,242.4 $1,879.2
Short-term investments 684.2 390.5
Accounts receivable, net 2,775.5 2,520.7
Inventories 2,390.9 2,167.8
Deferred income taxes 245.0 184.4
Prepaid expenses and other
current assets 566.7 486.2
------------------------
Total current assets 8,904.7 7,628.8
Property, plant and equipment 4,009.7 3,568.9
Less accumulated depreciation 2,189.7 1,914.3
------------------------
Property, plant and equipment, net 1,820.0 1,654.6
Identifiable intangible assets, net 384.4 406.1
Goodwill 130.8 130.8
Deferred income taxes and other assets 548.3 398.3
------------------------
Total assets $11,788.2 $10,218.6
========================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 6.3 $ 30.6
Notes payable 205.6 96.0
Accounts payable 1,004.7 800.9
Accrued liabilities 1,630.2 1,305.5
Income taxes payable 96.4 74.7
------------------------
Total current liabilities 2,943.2 2,307.7
Long-term debt 446.7 419.4
Deferred income taxes and other liabilities 784.8 643.2
Redeemable preferred stock 0.3 0.3
Shareholders' equity 7,613.2 6,848.0
------------------------
Total liabilities and shareholders' equity $11,788.2 $10,218.6
========================
*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 02/29/2008 02/28/2007 %Chg 02/29/2008 02/28/2007 %Chg
===================================================== ============================
(In millions)
U.S. Region
Footwear $1,080.0 $1,027.9 5% $3,183.2 $2,986.4 7%
Apparel 407.8 371.3 10% 1,297.2 1,278.2 1%
Equipment 68.7 77.8 -12% 227.9 232.3 -2%
---------------------- ----------------------
Total 1,556.5 1,477.0 5% 4,708.3 4,496.9 5%
EMEA Region
Footwear 784.8 630.0 25% 2,223.4 1,850.9 20%
Apparel 499.5 413.2 21% 1,552.4 1,321.2 17%
Equipment 100.0 81.6 23% 310.4 259.8 19%
---------------------- ----------------------
Total 1,384.3 1,124.8 23% 4,086.2 3,431.9 19%
Asia Pacific Region
Footwear 411.3 319.4 29% 1,077.5 862.8 25%
Apparel 272.6 217.4 25% 802.3 668.9 20%
Equipment 64.4 53.1 21% 173.9 154.8 12%
---------------------- ----------------------
Total 748.3 589.9 27% 2,053.7 1,686.5 22%
Americas Region
Footwear 177.9 152.8 16% 590.6 510.2 16%
Apparel 55.0 42.3 30% 186.5 149.2 25%
Equipment 21.5 17.4 24% 70.4 58.1 21%
---------------------- ----------------------
Total 254.4 212.5 20% 847.5 717.5 18%
3,943.5 3,404.2 16% 11,695.7 10,332.8 13%
Other 600.9 522.7 15% 1,843.3 1,609.9 14%
Total NIKE, Inc. revenues $4,544.4 $3,926.9 16% $13,539.0 $11,942.7 13%
NIKE, INC.
QUARTER ENDED YEAR TO DATE ENDED
PRE-TAX INCOME1,2 02/29/08 02/28/07 %Chg 02/29/08 02/28/07 %Chg
===================================================================================
U.S. Region $ 347.3 $ 296.4 17% $1,001.2 $ 934.2 7%
EMEA Region 334.3 255.7 31% 940.0 734.0 28%
Asia Pacific Region 193.0 132.1 46% 526.6 382.8 38%
Americas Region 51.9 42.1 23% 178.5 152.9 17%
Other 77.5 67.0 16% 243.5 208.5 17%
Corporate3 (335.3) (275.3) -22% (1,035.2) (871.3) -19%
______________________ _____________________
Total pre-tax income1 $ 668.7 $ 518.0 29% $1,854.6 $1,541.1 20%
====================== =====================
_____________________
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.