UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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): March 18, 2004
NIKE, INC.
(Exact Name of Registrant as Specified in Charter)
Oregon 1-10635 93-0584541
____________ ____________ ____________
(State of (Commission (I.R.S.Employer
Incorporation) File Number) Identification No.)
One Bowerman Drive
Beaverton, Oregon 97005-6453
(Address of Principal Executive Offices)
__________________________
(503) 671-6453
(Registrant's telephone number, including area code)
___________________________
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
The following exhibit is furnished with this Form 8-K:
99. Press Release dated March 18, 2004
Item 12. Results of Operations and Financial Condition).
Today NIKE, Inc. issued its third quarter earnings press release.
A copy of the release is attached hereto as Exhibit 99.
SIGNATURES
Pursuant to the requirements of the Securities 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: March 18, 2004
/s/ Donald W. Blair
____________________
By: Donald W. Blair
Chief Financial Officer
Exhibit 99
FOR IMMEDIATE RELEASE
INVESTOR CONTACT: MEDIA CONTACT:
Pamela Catlett Joani Komlos
503.671.4589 503.671.2013
NIKE REPORTS THIRD QUARTER EARNINGS
PER SHARE UP 57 PERCENT;
WORLDWIDE FUTURES ORDERS INCREASE 9.9 PERCENT
Highlights:
- Third quarter earnings increased 57 percent to $0.74 per diluted
share versus $0.47 per diluted share in the prior year quarter
- Revenues for the quarter grew 21 percent to $2.9 billion
- Gross margins improved 140 basis points to 42.1 percent
- Worldwide futures orders increased 9.9 percent
Beaverton, OR (March XX, 2004) -- NIKE, Inc. (NYSE:NKE) today reported
financial results for the Company's third quarter ended February 29,
2004. Third quarter revenues increased 21 percent to $2.9 billion,
versus $2.4 billion for the same period last year. Third quarter net
income totaled $200.3 million, or $0.74 per diluted share, compared to
$124.7 million, or $0.47 per diluted share, in the prior year.
Philip H. Knight, Chairman and Chief Executive Officer said, "It was
another great quarter for Nike. Top and bottom line results were again
driven by healthy consumer demand for innovative products and the
strength of Nike's diverse portfolio of businesses. For the first nine
months of the year, Nike's revenue has grown 14 percent and earnings per
share* are up 29 percent. As we look ahead, we are optimistic about the
significant long-term growth opportunities for our company."**
Futures Orders
The Company reported worldwide futures orders for athletic footwear and
apparel scheduled for delivery from March 2004 through July 2004, of $4.7
billion, 9.9 percent higher than such orders reported for the same period
last year. Approximately four points of this growth were due to changes
in currency exchange rates.
By region, futures orders for the USA were up 4.5 percent; Europe grew by
11 percent; Asia Pacific increased 23 percent; and the Americas increased
11 percent. In Europe, eight points of the increase were due to changes
in currency exchange rates. Currency exchange rate movements
contributed approximately five points and two points, respectively, to
futures growth in the Asia Pacific and Americas regions.
Knight continued, "Growing consumer demand for Nike footwear and apparel
in our international markets helped drive the 9.9 percent increase in
worldwide futures. Additionally, we are pleased by the continued
strength of our U.S. business, which recorded its strongest futures
orders growth in eight quarters."**
Regional Highlights
USA
___
During the third quarter, U.S. revenues increased four percent to $1.17
billion versus $1.13 billion for the third quarter of 2003. U.S.
athletic footwear revenues increased one percent to $772.8 million.
Apparel revenues increased seven percent to $329.3 million. Equipment
revenues increased 13 percent to $67.4 million.
Europe
______
Revenues for the European region (which includes the Middle East and
Africa) grew 36 percent to $880.0 million, up from $645.8 million for the
same period last year. Twenty-one points of this growth were the result
of changes in currency exchange rates. Footwear revenues increased 48
percent to $537.7 million, apparel revenues increased 19 percent to
$284.1 million and equipment revenues increased 34 percent to $58.2
million.
Asia Pacific
____________
Revenues in the Asia Pacific region grew 21 percent to $402.4 million
compared to $331.6 million a year ago. Ten points of this growth were
the result of changes in currency exchange rates. Footwear revenues were
up 15 percent to $214.2 million; apparel revenues increased 30 percent to
$150.1 million and equipment grew 26 percent to $38.1 million.
Americas
________
Revenues in the Americas region increased 26 percent to $135.0 million,
an improvement from $107.4 million in the third quarter of 2003. This
growth rate reflected an 11 point increase due to changes in currency
exchange rates. Footwear revenues were up 29 percent to $89.2 million,
apparel revenues increased 21 percent to $36.0 million and equipment
improved 15 percent to $9.8 million.
Other Revenues
______________
Other revenues, which include Nike Golf, Converse, Inc., Bauer Nike
Hockey Inc., Cole Haan (registered), and Hurley International LLC, grew
68 percent to $317.1 million from $188.2 million last year. The
acquisition of Converse accounted for 39 percentage points of this
increase.
Income Statement Review
Gross margins were 42.1 percent compared to 40.7 percent last year.
Selling and administrative expenses were 30.7 percent of third quarter
revenues, compared to 31.6 percent last year. The effective tax rate for
the third quarter was 34.8 percent.
Balance Sheet Review
At quarter end, global inventories stood at $1.7 billion, a 10 percent
increase from February 28, 2003. Cash and short-term investments were
$914.7 million at the end of the quarter, compared to $443.2 million last
year.
Share Repurchase
During the quarter, the Company purchased a total of 754,900 shares for
approximately $53.6 million in conjunction with the Company's second
four-year, $1 billion share repurchase program that was approved by the
Board of Directors in June 2000.
NIKE, Inc. based in 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; Bauer NIKE Hockey Inc., a leading designer and distributor
of hockey equipment; Cole Haan (registered), which designs, markets, and
distributes fine dress and casual shoes and accessories; 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/invest. This quarter, Nikebiz will
feature expanded information and relevant highlights of product and key
initiatives for the reporting period.
* The marked reference to earnings indicates earnings per diluted share
before prior year accounting change.
** 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, which may vary significantly from quarter to quarter.
(Tables Follow)
NIKE, INC. CONSOLIDATED FINANCIAL STATEMENTS
FOR THE QUARTER ENDED FEBRUARY 29, 2004
(In millions, except per share data)
INCOME QUARTER ENDING YEAR TO DATE ENDING
STATEMENT* 02/29/2004 02/28/2003 %Chg 02/29/2004 02/28/2003 %Chg
====================================================== ============================
Revenues $2,904.0 $2,400.9 21% $8,766.0 $7,711.9 14%
Cost of Sales 1,682.1 1,424.9 18% 5,043.0 4,568.7 10%
Gross Profit 1,221.9 976.0 25% 3,723.0 3,143.2 18%
% of revenue 42.1 % 40.7 % 42.5 % 40.8 %
SG&A 892.0 758.1 18% 2,664.1 2,324.6 15%
% of revenue 30.7 % 31.6 % 30.4 % 30.1 %
Interest Expense 5.5 7.0 -21% 21.1 21.4 -1%
Other 17.2 23.5 -27% 55.3 46.1 20%
----------------------- ----------------------
Income before income
taxes and cumulative
effect of accounting
change 307.2 187.4 64% 982.5 751.1 31%
Income Taxes 106.9 62.7 70% 341.9 257.2 33%
34.8 % 33.5 % 34.8 % 34.2 %
Income be cumulative
effect of accounting
change 200.3 124.7 61% 640.6 493.9 30%
Cumulative effect of
accounting change, net
of income taxes - - - 266.1
----------------------- ----------------------
Net Income $200.3 $124.7 61% $640.6 $227.8 181%
======================= ======================
Diluted EPS - before
accounting change $0.74 $0.47 57% $2.38 $1.84 29%
Cumulative effect of
accounting change - - - (0.99)
----------------------- ----------------------
$0.74 $0.47 57% $2.38 $0.85 180%
======================= ======================
Basic EPS - before
accounting change $0.76 $0.47 62% $2.43 $1.87 30%
Cumulative effect of
accounting change - - - (1.01)
----------------------- ----------------------
$0.76 $0.47 62% $2.43 $0.86 183%
======================= ======================
Weighted Average Common Shares Outstanding:
Diluted 271.1 266.7 269.3 267.7
Basic 263.5 263.9 263.2 264.6
======================= =======================
Dividend $0.20 $0.14 $0.54 $0.40
======================= =======================
*Certain prior year amounts have been reclassified to conform to fiscal year
2004 presentation. These changes had no impact on previously reported
results of operations or shareholders' equity.
NIKE, Inc.
BALANCE SHEET* 02/29/2004 02/28/2003
==================================================
ASSETS
Cash & Investments $914.7 $443.2
Accounts Receivable 2,033.9 1,952.4
Inventory 1,667.6 1,519.2
Deferred Taxes 218.5 190.8
Prepaid Expenses 364.9 244.4
Current Assets 5,199.6 4,350.0
Fixed Assets 3,162.8 2,906.2
Depreciation 1,551.4 1,291.1
Net Fixed Assets 1,611.4 1,615.1
Identifiable Intangible
Assets and Goodwill 500.7 183.9
Other Assets 292.6 255.0
------------------------
Total Assets $7,604.3 $6,404.0
========================
LIAB AND EQUITY
Current Long-Term Debt $ 6.2 $205.6
Payable to Banks 165.2 216.6
Accounts Payable 567.0 467.5
Accrued Liabilities 1,048.3 913.2
Income Taxes Payable 157.9 55.3
Current Liabilities 1,944.6 1,858.2
Long-term Debt 694.3 542.8
Def Inc Taxes & Oth Liab 401.9 167.5
Preferred Stock 0.3 0.3
Common Equity 4,563.2 3,835.2
------------------------
Total Liab. & Equity $7,604.3 $6,404.0
========================
NIKE, INC QUARTER ENDING YEAR TO DATE ENDING
Divisional Revenues* 02/29/2004 02/28/2003 %Chg 02/29/2004 02/28/2003 %Chg
===================================================== ============================
USA Region
Footwear $772.8 $761.4 1% $2,219.2 $2,222.5 0%
Apparel 329.3 307.1 7% 1,074.1 1,005.3 7%
Equipment and other 67.4 59.4 13% 215.7 215.3 0%
---------------------- ----------------------
Total 1,169.5 1,127.9 4% 3,509.0 3,443.1 2%
EMEA Region
Footwear 537.7 363.1 48% 1,600.2 1,292.5 24%
Apparel 284.1 239.4 19% 950.9 845.1 13%
Equipment and other 58.2 43.3 34% 191.3 158.8 20%
---------------------- ----------------------
Total 880.0 645.8 36% 2,742.4 2,296.4 19%
Asia Pacific Region
Footwear 214.2 185.8 15% 622.6 536.3 16%
Apparel 150.1 115.6 30% 437.9 365.6 20%
Equipment and other 38.1 30.2 26% 102.9 87.9 17%
---------------------- ----------------------
Total 402.4 331.6 21% 1,163.4 989.8 18%
Americas Region
Footwear 89.2 69.1 29% 296.0 245.1 21%
Apparel 36.0 29.8 21% 117.3 108.9 8%
Equipment and other 9.8 8.5 15% 31.5 29.2 8%
---------------------- ----------------------
Total 135.0 107.4 26% 444.8 383.2 16%
2,586.9 2,212.7 17% 7,859.6 7,112.5 11%
Other Brands 317.1 188.2 68% 906.4 599.4 51%
Total NIKE Inc. Revenues $2,904.0 $2,400.9 21% $8,766.0 $7,711.9 14%