Nike Reports 58 Percent Increase in 2nd Quarter Fiscal 2000 Earnings Per Share / Worldwide Futures Orders Increase 4 Percent
17.12.1999, 09:55
BEAVERTON, Ore. (PROTEXT) - Highlights: - Revenues for the quarter increased 8% to $2.1 billion - Earnings per share $0.38 versus $0.24 ($0.28 excluding FY99 Q2
restructuring charge) - Global footwear revenues increased 16 percent; globalapparel
down 2 percent - European revenues increased 13 percent; 22 percent inconstant
dollars - Asia Pacific revenues increased 23 percent; 9 percent in
constant dollars NIKE, Inc. (NYSE: NKE) today reported revenues and earningsfor the Company's second quarter ended November 30, 1999. Secondquarter net income totaled $107.5 million or $0.38 per dilutedshare compared to $68.9 million, or $0.24 per diluted share($0.28 excluding the restructuring charge from the second quarterFY 99). Second quarter revenues were $2.1 billion, up 8 percentfrom $1.9 billion last year. Philip H. Knight, Chairman and CEO, said, "There are manyreasons for encouragement in these results, including some verypositive financial trends for the Company.* Thomas E. Clarke, President and COO, added, "We're veryfocused on getting the top-line growing again and this pastquarter we did that for the first time in two years. We sawrevenue growth in every region -- a clear signal that ourproducts are clicking with consumers and a strong indicator ofour global brand strength. Clearly, we saw some better results inthe U.S. this quarter but the sales increase was really fueled bygrowth outside the U.S.* "In the U.S. market much has been written about theconsolidation taking place in the athletic retail channels. Whilethis may have an adverse effect on our revenues in the short run,long term it will result in the strengthening of the businesswith a healthier environment for Nike and its retailers.* "Outside the U.S., Nike's business is in terrific shape,reinforcing our conviction about the growth potential in thesemarkets. In the long-term, our business outside the U.S. will bethe key driver in taking us to the next level of sales andprofitability. In the short-term, we believe that the strength ofthese growing markets, combined with expanding U.S. margins, willprovide the basis for profit growth despite the retail issuesaffecting the U.S. athletic market."* Futures Orders The Company reported worldwide futures orders for athleticfootwear and apparel, scheduled for delivery between December1999 and April 2000 total $3.8 billion, 4 percent higher thansuch orders for the same period last year. Had the U.S. dollarremained constant at year-ago levels, worldwide futures orderswould have increased 5 percent.* Looking at futures orders by region, the U.S. region declined8 percent, Europe increased 15 percent, Asia Pacific increased 24percent and the Americas grew 14 percent. In constant dollars,futures orders for Europe increased 22 percent, Asia Pacific grew17 percent and Americas increased 13 percent.* Regional Highlights USA U.S. athletic footwear revenues grew 9 percent to $722.9million, compared to $665.9 million in the same period last year.U.S. athletic apparel revenues declined 10 percent in the quarterto $307 million. Europe European revenues in the quarter increased 13 percent to$484.7 million. Had the dollar remained constant at year-agolevels, revenues would have increased 22 percent. Revenues in theUnited Kingdom grew 37 percent on a constant dollar basis.Constant dollar revenues in France and Italy grew 19 and 21percent respectively. Asia Pacific Revenues in the Asia Pacific region increased 23 percent to$242.6 million. In constant dollars, regional revenues grew 9percent. Constant dollar revenues in Japan grew three percentcompared to a decrease of 16 percent in the first quarter offiscal 2000. Americas Revenues in the Americas region increased 21 percent to $145.1million. Had the dollar remained constant, revenues would haveincreased 28 percent. In Mexico, constant dollar revenues grew 51percent. Income Statement Review In the second quarter, consolidated revenues increased eightpercent. Other brand revenues, which include Bauer Nike Hockey,Cole Haan(R), and Nike IHM, Inc. decreased 3 percent to $108.7million. Gross margins in the quarter were 39.9 percent comparedto 35.7 percent last year. Selling and administrative expenseswere 30.3 percent of second quarter revenues, compared to 27.8percent last year. Balance Sheet Review Cash and short-term investments in the second quarter were$253.0. Inventories totaled $1.25 billion, up two percent fromAugust 31, 1999 and up 5 percent from November 30, 1998. Share Repurchase As of November 30, 1999, the Company had purchased a total of15,845,600 shares of Nike's Class B Common Stock forapproximately $730.7 million in the open market in conjunctionwith the $1 billion share repurchase program approved in December1997. During the second quarter, the Company purchased a total of4,483,100 shares for approximately $233.3 million. NIKE, Inc., based in Beaverton, Oregon, is the world's leadingdesigner and marketer of authentic athletic footwear, apparel,equipment and accessories for a wide variety of sports andfitness activities. Wholly owned Nike subsidiaries include BauerNIKE Hockey, Inc., the world's leading manufacturer of hockeyequipment; Cole Haan, which markets a line of high- quality men'sand women's dress and casual shoes; and Sports SpecialtiesCorporation, which markets a full line of licensed headwear.Total revenues for the trailing twelve months ending November 30,1999, were $8.92 billion. * The marked paragraphs contain forward-looking statementsthat involve risks and uncertainties that could cause actualresults to differ materially. These risks and uncertainties aredetailed from time to time in reports filed by NIKE with theS.E.C., including Forms 8-K, 10-Q, and 10-K. Some forward-looking statements in this release concern changes in futuresorders that are not necessarily indicative of changes in totalrevenues for subsequent periods due to cancellations and the mixof futures and "at once" orders, which may vary significantlyfrom quarter to quarter. NIKE's earnings releases and other financial information areavailable on the Internet at NikeBiz.com.
(Tables Follow)
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE QUARTER ENDED NOVEMBER 30, 1999
(In millions, except per share data) INCOME
QUARTER ENDING
YEAR TO DATEENDING STATEMENT
11/30/
11/30/ % Chg
11/30/
11/30/%Chg
1999
1998
1999
1998 Revenues
$2,059.7 $1,913.0
8% $4,560.8 $4,417.93% Cost of Sales 1,238.0 1,229.6
1% 2,772.6 2,792.3-1% Gross Profit
821.7
683.4
20% 1,788.2 1,625.610%
39.9%
35.7%
39.2 %
36.8% SG&A
624.8
531.9
17% 1,251.4 1,184.56%
30.3%
27.8%
27.4%
26.8% Interest Expense 6.7
10.1
-34%
16.7
24.3 -31% Other
17.1
6.7
155%
24.0
11.2114% Restructuring charge
(0.3)
20.9
101%
(0.3)
20.9101% Pre-tax Income 173.4
113.8
52%
496.4
384.729% Income Taxes
65.9
44.9
47%
188.6
151.924%
38.0 %
39.5%
38.0%
39.5% Net Income
$107.5
$68.9
56%
$307.8
$232.832% Diluted EPS
$0.38
$0.24
58%
$1.09
$0.8036% Basic EPS
$0.39
$0.24
63%
$1.10
$0.8234% Weighted Average
Common Shares
Outstanding: Diluted
281.2
287.7
283.4
289.8 Basic
277.3
283.0
279.2
284.9 Dividend
$0.12
$0.12
$0.24
$0.24 BALANCE SHEET
11/30/1999
11/30/1998 ASSETS Cash & Investments
$253.0
$254.6 Accounts Receivable
1,510.0
1,511.2 Inventory
1,251.7
1,197.7 Deferred Taxes
109.6
175.0 Prepaid Expenses
161.3
161.0
Current Assets
3,285.6
3,299.5 Fixed Assets
2,355.0
1,967.6 Depreciation
806.0
736.8
Net Fixed Assets
1,549.0
1,230.8 Identifiable Intangible
Assets and Goodwill
417.3
435.5 Other Assets
307.5
284.1 Total Assets
$5,559.4
$5,249.9 LIAB AND EQUITY Current Long-Term Debt
$50.2
$1.3 Payable to Banks
568.9
431.6 Accounts Payable
491.4
429.9 Accrued Liabilities
576.3
678.5 Income Taxes Payable
100.0
31.4
Current Liabilities
1,786.8
1,572.7 Long-term Debt
472.4
389.1 Def Inc Taxes & Oth Liab
87.6
52.3 Preferred Stock
0.3
0.3 Common Equity
3,212.3
3,235.5 Total Liab. & Equity
$5,559.4
$5,249.9 otsOriginal Text Service: NIKE, Inc. Internet:http://www.newsaktuell.de Contact: media, Corby Casler, 503-671-3578, or investors, or Rick Anguilla, 503-671-3139, both of NIKE,Inc. Company News On-Call:http://www.prnewswire.com/comp/622104.html or fax, 800-758-5804,ext. 622104 Web site: http://www.nikebiz.com
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