NIKE Reports Fourth Quarter and Fiscal 1999 Earnings/

Worldwide Futures Orders Increase 4 Percent BEAVERTON, Ore. (ots-PRNewswire) - Highlights: * Fourth quarter earnings per share $0.33 versus loss of $0.23 * Pre-tax net restructuring charge in the fourth quarter totaled $23.4 million * EPS before restructuring charge $0.38 * Revenues for the quarter decreased 5 percent to $2.18 billion * Worldwide futures orders increased 4 percent NIKE, Inc. (NYSE: NKE) today reported revenues and earnings for the Company's fourth quarter and fiscal year ended May 31, 1999. Fourth quarter revenues were $2.18 billion, down five percent from $2.31 billion last year. Fourth quarter net income was $94.4 million or $0.33 per diluted share, which includes a pre-tax net restructuring charge of $23.4 million, or $0.05 per diluted share. Excluding the restructuring charges in each period, the Company's net income was $108.5 million or $0.38 per diluted share, compared to $11.9 million, or $0.04 per diluted share in the prior year. For the fiscal year ended May 31, 1999, revenues decreased eight percent to $8.8 billion, compared to $9.6 billion in fiscal 1998. Full year net income totaled $451.4 million or $1.57 per diluted share. Exclusive of the restructuring charges in each of the periods, net income was $478.7 million or $1.66 per diluted share compared to $479.1 million or $1.62 per diluted share. Philip H. Knight, Chairman and CEO, said, "Fiscal 1999 was a year of hard work and strategic realignment for us at Nike. While we achieved slightly higher EPS on an eight percent decrease in revenues, our primary goal was to position ourselves for the next leg of Nike's growth. The road to that growth will be a more challenging one than we've faced in the past but we're confident we possess the right mix of talent and desire to take advantage of the opportunities in front of us."* Futures Orders The Company reported worldwide futures orders for athletic footwear and apparel scheduled for delivery between June and November 1999 total $4.2 billion, four percent higher than such orders for the same period last year. The cumulative impact of exchange rates on futures orders was not materially significant.* By region, the USA was down five percent, Europe increased 22 percent, Asia Pacific was up 19 percent and the Americas was down 11 percent. In constant dollars, futures orders for Europe increased 22 percent, Asia Pacific increased 11 percent and Americas was down 10 percent.* Regional Highlights USA Quarterly U.S. athletic footwear revenues declined three percent to $832.7 million, compared to $854.6 million in the same period last year. U.S. athletic apparel revenues decreased 19 percent in the quarter to $310.7 million. Mr. Knight noted, "Despite lower revenues in the quarter, the U.S. athletic footwear market showed its resilience this past spring. Our goal for fiscal 1999 was to rekindle consumer demand and there are clear signs we've made some progress on the footwear front. Our challenge is to maintain that footwear momentum into fiscal 2000 while focusing on reviving demand in our apparel business." For the full year, U.S. athletic footwear revenues decreased seven percent to $3.2 billion. U.S. athletic apparel revenues decreased 11 percent to $1.4 billion. Europe European revenues in the quarter increased five percent to $545.0 million. The cumulative impact of exchange rates on European revenues was not materially significant in the quarter. Full-year European revenues grew eight percent. Had the U.S. dollar remained constant, full-year revenues would have increased six percent. Mr. Knight said, "While the past two years have been difficult for Nike as a whole, our European business has been a shining light. Based on the strong futures numbers for both footwear and apparel, we see opportunities to continue to gain market share in Europe in fiscal 2000."* Asia Pacific Quarterly revenues in the Asia Pacific region declined six percent to $233.7 million. In constant dollars, regional revenues decreased 11 percent. Revenues in Japan were flat in the quarter compared to last year. Full-year Asia Pacific revenues decreased 33 percent. Had the U.S. dollar remained constant, full-year revenues would have decreased 29 percent. Full-year revenues in Japan decreased 37 percent in both real and constant dollars. "Our futures orders would indicate that we have seen the bottom in our Asia Pacific business," said Mr. Knight. "While these numbers clearly mark an upturn in our business in the region, management's focus remains on capturing sustainable and profitable growth in Asia Pacific and avoiding the pitfalls associated with accelerated top-line growth."* Americas Revenues in the Americas region decreased 14 percent in the quarter to $130.1 million. Had the dollar remained constant, revenues would have decreased 10 percent. For the full year, Americas revenues decreased 15 percent. In constant dollars, full-year Americas revenues decreased 10 percent. Restructuring Charge Fiscal year 1999 earnings were reduced by a restructuring charge of $60.1 million, of which $32.7 million was incurred in the fourth quarter. Offsetting this amount in fiscal 1999 was $15.0 million of reversals ($9.3 million in the fourth quarter) from the fiscal 1998 restructuring charge, resulting in a net charge of $45.1 million. The fiscal 1999 charge relates primarily to a reduction in workforce as a result of better aligning the Company's cost structure to planned revenue growth as well as the Company's shift to outsourcing certain of its information technology functions. This resulted in a severance cost of approximately $30 million, related to those affected employees. Also included is the write-off of certain assets related to the change in strategies around the Company's warehouse distribution facilities in the United States. Income Statement Review In the fourth quarter, U.S. athletic footwear, apparel and equipment revenues totaled $1.2 billion, a decrease of eight percent. Non-U.S. athletic footwear, apparel and equipment revenues decreased one percent to $908.8 million. Had the U.S. dollar remained constant at year-ago levels, non-U.S. revenues would have decreased 2 percent in the quarter. Other revenues, which include Bauer NIKE Hockey Inc., Cole Haan(R), Nike IHM, Inc. and Nike Team Sports, Inc., decreased 14 percent to $105.5 million. Selling and administrative expenses were 30.8 percent of fourth quarter revenues, compared to 31.2 percent last year. For the full year, selling and administrative expenses were 27.6 percent of revenues, compared to 27.5 percent in fiscal 1998. Included in Other Income and Expense for the quarter is a one- time credit of $15.0 million related to the Company's decision to change its method of accounting for inventory in the United States from the last in first out method (LIFO) to the first in first out method (FIFO). Balance Sheet Review At fiscal year-end, global inventories stood at $1.2 billion, a decrease of 14 percent from last year. Cash and short-term investments increased to $198.1 million in the fourth quarter. Share Repurchase In the fourth quarter the company purchased 630,300 shares for approximately $37 million under the new $1 billion four-year program approved in December 1998. During all of fiscal 1999, the company purchased 7.4 million shares for a total of $302 million under the new program. Total shares purchased under the program to date were 8,676,500 for a total of $355.5 million. NIKE Inc., based in Beaverton, Oregon, is the world's leading designer and marketer of authentic athletic footwear, apparel, equipment and accessories for a wide variety of sports and fitness activities. Wholly owned Nike subsidiaries include Bauer NIKE Hockey 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 Nike Team Sports (formerly Sports Specialties), which markets licensed team products. NOTE: * 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. Nike's earnings releases and other financial information are available on the Internet at CONSOLIDATED FINANCIAL STATEMENTS


(in millions, except per share data) INCOME QUARTER ENDING YEAR TO DATE ENDING STATEMENT 5/31/1999 5/31/1998 %Chg 5/31/1999 5/31/1998 %Chg

Revenues $2,182.3 $2,307.8 -5% $8,776.9 $9,553.1 - 8%

Cost of Sales 1,336.4 1,561.7 -14% 5,493.5 6,065.5 - 9%

Gross Profit 845.9 746.1 13% 3,283.4 3,487.6 - 6%

38.8% 32.3% 37.4% 36.5%

SG&A 672.3 20.4 -7% 2,426.6 2,623.8 - 8%

30.8% 31.2% 27.6% 27.5%

Interest Expense 9.4 16.3 -42% 44.1 60.0 - 27%

Other (15.2) (10.0) 52% 21.5 20.9 3%


charge 23.4 129.9 -82% 45.1 129.9 - 65%

Pre-tax Income 156.0 (110.5) 241% 746.1 653.0 14%

Income Taxes 61.6 (42.8) 244% 294.7 253.4 16%

39.5% 38.7% 39.5% 38.8%

Net Income $94.4 ($67.7) 239% $451.4 $399.6 13%

Diluted EPS $0.33 ($0.23) 243% $1.57 $1.35 16%

Basic EPS $0.33 ($0.23) 243% $1.59 $1.38 15%

Weighted Average Common Shares Outstanding:

Diluted 287.3 292.6 288.3 295.0

Basic 282.1 287.1 283.3 288.7

Dividend $0.12 $0.12 $0.48 $0.46

BALANCE SHEET 5/31/1999 5/31/1998


Cash & Investments $198.1 $108.6

Accounts Receivable 1,540.1 1,674.4

Inventory 1,199.3 1,396.6

Deferred Taxes 120.6 156.8

Income taxes receivable 15.9 0.0

Prepaid Expenses 190.9 196.2

Current Assets 3,264.9 3,532.6

Fixed Assets 2,001.3 1,819.6

Depreciation 735.5 666.5

Net Fixed Assets 1,265.8 1,153.1

Identifiable Intangible

Assets and Goodwill 426.6 435.8

Other Assets 290.4 275.9

Total Assets $5,247.7 $5,397.4


Current Long-Term Debt $1.0 $1.6

Payable to Banks 419.1 480.2

Accounts Payable 373.2 584.6

Accrued Liabilities 653.6 608.5

Income Taxes Payable 0.0 28.9

Current Liabilities 1,446.9 1,703.8

Long-term Debt 386.1 379.4

Def Inc Taxes & Oth Liab 79.8 52.3

Preferred Stock 0.3 0.3

Common Equity 3,334.6 3,261.6

Total Liab. & Equity $5,247.7 $5,397.4 ots Original Text Service: NIKE, Inc. Internet: Contact: media, Lee Weinstein, (USA) 503-671-3080, or investors, Rick Anguilla, (USA) 503-671-3139, both of NIKE, Inc. Company News On-Call: or fax, (USA) 800-758- 5804, ext. 622104 Web site: Web site:

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