SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 9, 1996
NIKE, INC.
(Exact name of registrant as specified in its charter)
Oregon 1-10635 93-0584541
(State of incorporation) (Commission File (IRS Employer
Number) Identification
No.)
One Bowerman Drive, Beaverton, Oregon 97005-6453
(Address of principal executive offices) (Zip Code)
(503) 671-6453
(Registrant's telephone number, including area code)
Item 5. OTHER EVENTS
The Registrant issued the following press release on July 9, 1996:
Beaverton, OR (July 9, 1996) -- NIKE, Inc. (NYSE:NKE) today reported
record
revenues and earnings for the Company's fourth quarter and fiscal year
ended May 31, 1996. Fourth quarter net income totaled $156.4 million,
or $1.06 per share, compared to $113.4 million, or $0.78 per share in
the
fourth quarter last year. Fourth quarter revenues were $1.92 billion,
up
36 percent compared to $1.41 billion last year.
For the fiscal year ended May 31, 1996, net income grew to a record
$553.2
million or $3.77 per share, increases of 38 and 39 percent respectively,
compared to $399.7 million or $2.72 per share in fiscal 1995. Full year
revenues totaled a record $6.47 billion compared to $4.76 billion last
year,
an increase of 36 percent.
The Company also reported worldwide futures orders for athletic footwear
and apparel scheduled for delivery between June and November 1996 total
a record $3.93 billion, 55 percent higher than such orders for the same
period last year. Had the U.S. dollar remained constant at year-ago
levels, worldwide futures orders would have increased 57 percent. This
significant increase in worldwide orders for the period is due both to
continued growth of NIKE core business and a change in the mix of
futures and "at once" shipments as NIKE futures programs become
more established on a global basis, particularly in apparel. *
NIKE Chairman Philip H. Knight stated, "This past year has been one
of expansive growth for the NIKE brand. The 99 percent increase in
sales of U.S. athletic apparel is testament to the powerful brand
equity we've created. U.S. footwear, a segment where some
questioned our capacity to gain additional market share, grew by
20 percent.
"Outside the U.S., our growth was stronger and more equally balanced,
as international footwear grew 35 percent while apparel increased 38
percent for the year. We are starting to see the benefits of our
investment spending outside the U.S. as we balance the power of the
global NIKE brand with our localized sports marketing efforts.
"In the fourth quarter, U.S. athletic footwear and apparel revenues
topped $1 billion for the first time ever in a quarter. In U.S.
footwear, the top revenue category was women's fitness which grew 57
percent in the quarter. The women's sport category grew 77 percent in
the quarter while men's training was up 67 percent. The running market
continues to show renewed strength, with sales of men's running up 56
percent in the fourth quarter.
"The depth of NIKE's brand strength can best be seen in our U.S. apparel
business, where revenues increased 117 percent in the fourth quarter.
Our U.S. apparel futures orders remain extremely strong, driven by
outstanding product and retailers' increasing use of our apparel futures
program. This broad-based acceptance of NIKE apparel validates our
belief
that we will be the dominant player in the U.S. athletic apparel market
in
fiscal 1997.*
"Outside the U.S., there is great parity in our growth, with each of our
three regions -- Europe, Asia Pacific and the Americas -- showing
revenue
increases of over 30 percent for the fourth quarter and the full year.
"The NIKE brand has excellent momentum going into fiscal 1997, as
evidenced
by our record futures orders. In U.S. footwear, our two largest
categories
showed particular strength with men's basketball up 48 percent and
women's
fitness up 67 percent. The balanced growth can also be seen in men's
running where U.S. footwear futures orders increased 110 percent."*
In the fourth quarter, U.S. athletic footwear and apparel revenues
totaled $1.02 billion, an increase of 44 percent. International
athletic
footwear and apparel revenues increased 35 percent to $768.7 million.
Revenues from other brands, which include Bauer (formerly Canstar
Sports),
Cole Haan, Tetra Plastics and Sports Specialties, decreased 1 percent
to
$132.9 million.
Consolidated gross margins for the quarter were 39.6 percent compared to
40.1 percent last year. Selling and administrative expenses were 25.4
percent of fourth quarter revenues, compared with 26.2 percent last
year.
NIKE's balance sheet remained very strong. The current ratio at May 31,
1996, was 1.9 to 1. Cash and short-term investments totaled $262.1
million.
Total U.S. footwear inventory units ended the quarter essentially flat
compared to February 29, 1996 and up 17 percent from May 31, 1995.
For the full fiscal year, U.S. athletic footwear and apparel revenues
increased 32 percent to $3.62 billion. U.S. athletic footwear grew
20 percent to $2.77 billion while U.S. apparel rose to $842.5 million,
an increase of 99 percent.
Full-year international athletic footwear and apparel revenues
increased 36 percent to $2.33 billion. International athletic footwear
totaled $1.68 billion, an increase of 35 percent while international
apparel grew 38 percent to $651.3 million. Revenues from other brands
increased 68 percent to $521.9 million. Excluding Bauer, revenues from
other brands would have increased 16 percent.
Consolidated gross margins for 1996 were 39.6 percent of revenues
compared
to 39.8 percent last year. Selling and administrative expenses were
24.6
percent of revenues compared with 25.4 percent last year. Spending in
absolute dollars increased $378.9 million or 31 percent from last year.
The Company's tax rate for the full year remained constant at 38.5
percent.
As of May 31, 1996 the Company had purchased a total of 5.1 million
shares of NIKE's Class B Common Stock for approximately $301.7 million
in
the open market in conjunction with the $450 million, three-year share
repurchase program approved in July 1993. During fiscal 1996, the
Company
purchased a total of 200,000 shares for approximately $18.8 million. The
Board of Directors voted to extend the existing share repurchase program
until July 1, 1999.
NIKE, Inc., based in Beaverton, Oregon, is the world's leading designer
and
marketer of authentic athletic footwear, apparel and accessories for a
wide
variety of sports and fitness activities. Wholly-owned NIKE
subsidiaries
include Bauer, Inc., the world's leading manufacturer of hockey
equipment;
Cole Haan, which markets a line of high-quality men's and women's dress
and
casual shoes; and Sports Specialties, which markets a full line of
licensed
headwear. All per share data reflects the Company's 2-for-1 stock split
which
became effective October 30, 1995.
*The marked items are 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 futures orders which are not
necessarily indicative of total revenues for subsequent periods due to
the mix
of futures and "at once" orders, which may vary significantly from
quarter to
quarter.
NIKE, INC.
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE QUARTER ENDED MAY 31, 1996
(In thousands, except per share data)
INCOME QUARTER ENDING Y-T-D
ENDING
STATEMENT 5/31/96 5/31/95 5/31/96
5/31/95
Revenues $1,921,338 $1,412,036 $6,470,625
$4,760,834
Costs & Expenses
Cost of Sales 1,161,402 846,398 3,906,746
2,865,280
SG&A 487,787 370,282 1,588,612
1,209,760
Interest Expense 8,499 9,253 39,498
24,208
Other 9,706 5,514 36,679
11,722
Total Costs 1,667,394 1,231,447 5,571,535
4,110,970
_________ _________ _________
_________
Pre-tax Income 253,944 180,589 899,090
649,864
Income Taxes 97,500 67,200 345,900
250,200
_________ _________ _________
_________
Net Income $156,444 $113,389 $553,190
$399,664
========================================================
Income Per Share $1.06 $0.78 $3.77
$2.72
Dividend $0.15 $0.13 $0.58
$0.48
Average Shares Outstanding 147,733 145,878 146,804
147,006
========================================================================
===========
QUARTER ENDING Y-T-D
ENDING
______________
____________
Divisional Revenues 5/31/96 5/31/95 5/31/96
5/31/95
U.S. Athletic Footwear $773,922 $595,229
$2,772,532 $2,309,359
U.S. Athletic Apparel 245,729 113,216
842,519 423,884
_________ _________
_________ _________
Total U.S. Athletic 1,019,651 708,445
3,615,051 2,733,243
International Footwear 549,876 398,022
1,682,313 1,244,286
International Apparel 218,861 171,635
651,346 472,685
_________ _________
_________ _________
Total International 768,737 569,657
2,333,659 1,716,971
Other Brands 132,950 133,934
521,915 310,620
_________ _________
_________ _________
Total $1,921,338 $1,412,036
$6,470,625 $4,760,834
QUARTER ENDING Y-T-D ENDING
Percentage Change 5/31/96 5/31/95 5/31/96
5/31/95
U.S. Athletic Footwear 30% 39% 20%
24%
U.S. Athletic Apparel 117% 47% 99%
25%
Total U.S. Athletic 44% 40% 32%
24%
International Footwear 38% 28% 35%
25%
International Apparel 28% 29% 38%
32%
Total International 35% 29% 36%
27%
Other Brands -1% 142% 68%
38%
Total 36% 41% 36%
26%
BALANCE SHEET 5/31/96 5/31/95
ASSETS
Cash & Investments $262,117 $216,071
Accounts Receivable 1,346,125 1,053,237
Inventory 931,151 629,742
Deferred Taxes 93,120 72,657
Prepaid Expenses 94,427 74,221
___________________________________
Current Assets 2,726,940 2,045,928
Fixed Assets 1,047,705 891,213
Depreciation 404,246 336,334
___________________________________
Net Fixed Assets 643,459 554,879
___________________________________
Identifiable Intangible 474,812 495,907
Assets and Goodwill
Other Assets 106,417 46,031
___________________________________
Total Assets $3,951,628 $3,142,745
===================================
LIAB AND EQUITY
Current Long-Term Debt $7,301 $31,943
Payable to Banks 445,064 397,100
Accounts Payable 455,034 297,656
Accrued Liabilities 480,407 345,224
Income Taxes Payable 79,253 35,612
___________________________________
Current Liabilities 1,467,059 1,107,535
Long-term Debt 9,584 10,565
Non-current Deferred Tax 1,883 17,789
Other Long-Term Liabilities 41,402 41,867
Preferred Stock 300 300
Common Equity 2,431,400 1,964,689
___________________________________
Total Liab. & Equity $3,951,628 $3,142,745
===================================
ITEM 5. OTHER EVENTS
Currently certain of the Company
As international operations report
their results of operations on a one month lag which allows more time to
compile results. The Company has taken steps to improve its internal
reporting procedures that will allow for more timely reporting of these
operations. Beginning in the first quarter of fiscal year 1997, the one
month lag will be eliminated and as a result, the May 1996 results of
operations of these entities will be recorded to retained earnings in
fiscal 1997. The following tables include adjusted quarterly data for
fiscal 1996 and 1995 as if the change were already in effect.
Fiscal Year 1996
________________________________________________________________________
________________________________
Three Months Ended
________________________________________________________________________
________________________________
8/31/95 11/30/95
2/29/96 5/31/96
______________________
______________________ ______________________
_______________________
As Reported Adjusted As Reported
Adjusted As Reported Adjusted As Reported Adjusted
Revenues $1,614,649 $1,700,020 $1,443,027
$1,356,758 $1,491,611 $1,582,039 $1,921,338 $1,852,067
Costs & expenses:
Costs of sales 967,522 1,013,379 875,446
828,129 902,376 953,316 1,161,402 1,120,553
Selling & administrative 359,525 369,043 358,583
353,715 382,717 387,534 487,787 497,703
Interest expense 11,377 11,251 7,984
8,527 11,638 12,086 8,499 4,929
Other (income)/
expense, net 8,344 10,249 8,798
7,375 9,831 11,429 9,706 11,455
_________ _________ _________
_________ _________ _________ _________ _________
1,346,768 1,403,922 1,250,811
1,197,746 1,306,562 1,364,365 1,667,394 1,634,640
_________ _________ _________
_________ _________ _________ _________ _________
Income before taxes 267,881 296,098 192,216
159,012 185,049 217,674 253,944 217,427
Income taxes 103,100 114,000 74,000
61,200 71,300 83,800 97,500 83,700
_________ _________ _________
_________ _________ _________ _________ ________
Net income $164,781 $182,098 $118,216
$97,812 $113,749 $133,874 $156,444 $133,727
========== ========== =========
========= ========= ========= ========= =========
Net income per
common share $1.13 $1.25 $0.80
$0.67 $0.78 $0.91 $1.06 $0.91
========== ========== =========
========= ========= ========= ========= =========
Dividends declared
per common share $0.125 $0.125 $0.15
$0.15 $0.15 $0.15 $0.15 $0.15
========== ========== =========
========= ========= ========= ========= =========
Average number of common
and common equivalent
shares 145,852 145,852 146,994
146,994 147,106 147,106 147,733 147,733
Fiscal Year 1995
________________________________________________________________________
________________________
Three Months Ended
________________________________________________________________________
________________________
8/31/94 11/30/94
2/28/95 5/31/95
_____________________
_____________________ _____________________ _____________________
As Reported Adjusted As Reported
Adjusted As Reported Adjusted As Reported Adjusted
Revenues $1,170,355 $1,253,532 $1,053,746 $
976,016 $1,124,697 $1,207,934 $1,412,036 $1,351,132
Costs & expenses:
Costs of sales 700,447 746,914 640,031
599,385 678,404 720,548 846,398 816,768
Selling & administrative 292,294 301,383 268,873
255,960 278,311 283,508 370,282 373,482
Interest expense 4,757 5,206 3,941
4,360 6,257 6,006 9,253 9,565
Other (income)/
expense, net (830) 1,162 1,662
2,980 5,376 1,726 5,514 6,133
_________ _________ _________
_________ _________ ________ _______ _______
996,668 1,054,665 914,507
862,685 968,348 1,011,788 1,231,447 1,205,948
_________ _________ _________
_________ _________ _________ _________ _________
Income before taxes 173,687 198,867 139,239
113,331 156,349 196,146 180,589 145,184
Income taxes 67,700 77,500 54,300
44,000 61,000 76,400 67,200 54,000
_________ _________ _________
_________ ________ ________ __________ _________
Net income $105,987 $121,367 $ 84,939
$69,331 $ 95,349 $119,746 $113,389 $91,184
========== ========== =========
========= ========= ========= ========== =========
Net income per
common share $0.71 $0.82 $0.58
$0.47 $0.65 $0.81 $0.78 $0.63
========== ========== =========
========= ========= ========= =========== ==========
Dividends declared
per common share 0.100 0.100 0.125
0.125 0.125 0.125 0.125 0.125
========== ========== ==========
========== ========== ========== ============ ==========
Average number of common
and common equivalent
shares 148,444 148,444 146,738
146,738 146,964 146,964 145,878 145,878
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
NIKE, Inc.
(Registrant)
Date: July 16, 1996
By /s/ Robert S. Falcone
Robert S. Falcone
Vice President and
Chief Financial Officer