-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NE2SxgJrG/8csWJ2EXwhHsyfpEOqu+o0G0HyfXxqJQOr2bSttrash8RlTLYBVZ68 crsYeCS0SMORMM4cdOkpAw== 0000320187-06-000150.txt : 20060921 0000320187-06-000150.hdr.sgml : 20060921 20060921162347 ACCESSION NUMBER: 0000320187-06-000150 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060921 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060921 DATE AS OF CHANGE: 20060921 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NIKE INC CENTRAL INDEX KEY: 0000320187 STANDARD INDUSTRIAL CLASSIFICATION: RUBBER & PLASTICS FOOTWEAR [3021] IRS NUMBER: 930584541 STATE OF INCORPORATION: OR FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10635 FILM NUMBER: 061102413 BUSINESS ADDRESS: STREET 1: ONE BOWERMAN DR CITY: BEAVERTON STATE: OR ZIP: 97005-6453 BUSINESS PHONE: 5036713173 MAIL ADDRESS: STREET 1: ONE BOWERMAN DR CITY: BEAVERTON STATE: OR ZIP: 97005-6453 8-K 1 f8k060921er.txt FORM 8-K - Q1FY07 EARNINGS RELEASE 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): September 21, 2006 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) NO CHANGE ______________________ (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ___________________________ Item 2.02 Results of Operations and Financial Condition Today NIKE, Inc. issued a press release disclosing financial results for the fiscal quarter ended August 30, 2006. The text of the release is furnished herewith as Exhibit 99. (d) Exhibits. Item 9.01 Financial Statements and Exhibits The following exhibit is furnished with this Form 8-K: 99. Press Release dated September 21, 2006. 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: September 21, 2006 /s/ Donald W. Blair __________________________ By: Donald W. Blair Chief Financial Officer EX-99 2 exhibit99er.txt EXHIBIT 99 - EARNINGS RELEASE EXHIBIT 99 FOR IMMEDIATE RELEASE MEDIA CONTACT: INVESTOR CONTACT: Alan Marks Pamela Catlett 503.671.4235 503.671.4589 NIKE REPORTS FIRST QUARTER EARNINGS PER SHARE OF $1.47 Worldwide futures orders up 6 percent BEAVERTON, Ore. (September 21, 2006) - NIKE, Inc. (NYSE:NKE) today reported financial results for the first quarter, ended August 31, 2006. Revenue grew 9 percent to $4.2 billion, compared to $3.9 billion for the same period last year. Changes in currency exchange rates increased revenue growth by 2 percentage points for the quarter. First quarter net income declined 13 percent to $377.2 million, compared to $432.3 million in the prior year and diluted earnings per share declined 9 percent to $1.47, versus $1.61 last year. Results for the first quarter included a $40.8 million expense, net of taxes, related to the expensing of stock options, which reduced diluted earnings per share by $0.16. Excluding stock option expense first quarter net income declined 3 percent and diluted earnings per share increased 1 percent to $1.63. Mark Parker, Nike, Inc. President and Chief Executive Officer, said, "We're off to a strong start. While making major brand investments to drive key markets and implementing new accounting rules to include stock option expenses, we continued to deliver strong top line growth and laid the foundation for another successful year. "We are confident in the year ahead, the fundamental strength of our business and our brands. We continue to deliver breakthrough innovations, like our global soccer initiative, Joga Bonito, and our Nike+ product concept. We also see significant momentum across our brand portfolio with strong performances from Converse, Brand Jordan and Nike Golf. "* Futures Orders The Company reported worldwide futures orders for athletic footwear and apparel, scheduled for delivery from September 2006 through January 2007, totaling $5.2 billion, 6 percent higher than such orders reported for the same period last year. Changes in currency exchange rates did not significantly impact this growth.* By region, futures orders for the U.S. increased 8 percent; Europe (which includes the Middle East and Africa) increased 2 percent; Asia Pacific grew 11 percent; and the Americas declined 4 percent. Changes in currency exchange rates increased the reported futures orders growth in Europe by 1 percentage point. Changes in currency exchange rates increased reported futures orders growth in Asia Pacific by 1 percentage point. In the Americas region changes in currency exchange rates decreased reported futures growth by 5 percentage points.* Regional Highlights U.S. During the first quarter, U.S. revenues increased 6 percent to $1.6 billion versus $1.5 billion for the first quarter of fiscal 2006. U.S. athletic footwear revenues increased 6 percent to $1.1 billion. Apparel revenues increased 9 percent to $431.5 million. Equipment revenues declined 1 percent to $91.3 million. U.S. pre-tax income declined 2 percent to $338.9 million. Europe First quarter revenues for the European region grew 4 percent to $1.3 billion from $1.2 billion for the same period last year. Changes in currency exchange rates increased revenue growth by 3 percentage points. Footwear revenues were $679.5 million, down 1 percent from $685.1 million last year. Apparel revenues increased 12 percent to $487.0 million and equipment revenues increased 7 percent to $104.4 million. Pre-tax income declined 8 percent to $302.5 million. Asia Pacific In the first quarter revenues in the Asia Pacific region grew 13 percent to $518.4 million compared to $459.6 million a year ago. Changes in currency exchange rates did not have a significant impact on revenue growth. Footwear revenues were up 12 percent to $266.0 million, apparel revenues increased 14 percent to $200.9 million and equipment revenues grew 13 percent to $51.5 million. Pre-tax income increased 8 percent to $98.9 million. Americas Revenues in the Americas region increased 13 percent to $242.5 million, an improvement from $213.7 million in the first quarter of fiscal 2006. Currency exchange rates contributed 3 percentage points to this growth rate. Footwear revenues were up 10 percent to $172.3 million, apparel revenues increased 26 percent to $51.2 million and equipment revenues grew 18 percent to $19.0 million. Pre-tax income was up 9 percent to $48.4 million. Other Businesses For the first quarter, Other business revenues, which include Converse Inc., NIKE Golf, NIKE Bauer Hockey Inc., Cole Haan Holdings Incorporated, Hurley International LLC and Exeter Brands Group LLC, grew 21 percent to $560.4 million from $462.3 million last year. Pre-tax income increased 120 percent to $87.9 million for the quarter. During the first quarter the Company settled a previously disclosed arbitration ruling involving Converse and a former South American licensee. The final settlement was lower than the accrual, which resulted in a $14.2 million benefit to Other business pretax income and increased the Company's diluted earnings per share for the first quarter by $0.03. Income Statement Review Gross margins were 44.1 percent compared to 45.3 percent last year for the first quarter. Selling and administrative expenses were 30.8 percent of first quarter revenues, compared to 28.6 percent last year. The effective tax rate for the first quarter was 34.5 percent. Balance Sheet Review At quarter end, global inventories stood at $2.1 billion, an increase of 15 percent from August 31, 2005. Cash and short-term investments were $1.7 billion at the end of the quarter, compared to $1.9 billion last year. Share Repurchase During the first quarter, the Company purchased a total of 6,027,300 shares for approximately $476.7 million. During the quarter the Company completed its previous four-year $1.5 billion share repurchase program approved by the Board of Directors in June 2004 and started repurchasing shares under the Company's new four-year $3 billion share repurchase program approved by the Board of Directors in June 2006. As of the end of the first quarter the Company had purchased 4,018,576 shares for approximately $314.1 million under the new plan. 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; NIKE Bauer Hockey Inc., a leading designer and distributor of hockey equipment; Cole Haan Holdings Incorporated, a leading designer and marketer of luxury shoes, handbags, accessories and coats; Hurley International LLC, which designs, markets and distributes action sports and youth lifestyle footwear, apparel and accessories and Exeter Brands Group LLC, which designs and markets athletic footwear and apparel for the value retail channel. NIKE's earnings releases and other financial information are available on the Internet at www.nikebiz.com/invest. * 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 AUGUST 31, 2006 (In millions, except per share data) INCOME QUARTER ENDING STATEMENT 08/31/2006 08/31/2005 %Chg ==================================================================================== Revenues $4,194.1 $3,862.0 9% Cost of Sales 2,344.9 2,113.9 11% ---------------------- Gross margin 1,849.2 1,748.1 6% 44.1 % 45.3 % Selling and administrative expense 1,289.7 1,104.4 17% 30.8 % 28.6 % Interest (income) expense, net (13.1) (6.4) 105% Other (income) expense, net (3.2) (9.9) -68% ---------------------- Income before income taxes 575.8 660.0 -13% Income taxes 198.6 227.7 -13% ---------------------- 34.5 % 34.5 % ---------------------- Net income $377.2 $432.3 -13% ====================== Diluted EPS $1.47 $1.61 -9% ====================== Basic EPS $1.49 $1.66 -10% ====================== Weighted Average Common Shares Outstanding: Diluted 256.0 268.6 Basic 252.7 260.9 ======================= Dividend $0.31 $0.25 =======================
NIKE, Inc. BALANCE SHEET* 08/31/2006 08/31/2005 ==================================================== ASSETS Current assets: Cash and equivalents $1,030.7 $1,588.9 Short-term investments 693.9 304.2 Accounts receivable, net 2,569.1 2,390.6 Inventories 2,134.3 1,850.6 Deferred income taxes 188.8 106.3 Prepaid expenses and other current assets 382.3 425.7 ______________________ Total current assets 6,999.1 6,666.3 Property, plant and equipment 3,451.1 3,186.5 Less accumulated depreciation 1,802.4 1,605.3 ______________________ Property, plant and equipment, net 1,648.7 1,581.2 Identifiable intangible Assets, net 407.5 404.7 Goodwill 130.8 135.4 Deferred income taxes and other Assets 384.4 328.1 ------------------------ Total Assets $9,570.5 $9,115.7 ======================== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 30.5 $ 256.0 Notes payable 61.3 64.3 Accounts payable 867.7 708.1 Accrued liabilities 1,297.7 1,057.0 Income taxes payable 152.5 148.1 Total current liabilities 2,409.7 2,233.5 Long-term debt 380.4 428.4 Def Inc Taxes & Oth Liab 559.2 489.7 Redeemable preferred stock 0.3 0.3 Shareholders' equity 6,220.9 5,963.8 ------------------------ Total liabilities & shareholders' equity $9,570.5 $9,115.7 ======================== *Certain prior year amounts have been reclassified to conform to fiscal year 2007 presentation. These changes had no impact on previously reported results of operations or shareholders' equity.
NIKE, INC QUARTER ENDING Divisional Revenues 08/31/2006 08/31/2005 %Chg =================================================================================== U.S. Region Footwear $1,079.1 $1,021.1 6% Apparel 431.5 395.5 9% Equipment 91.3 92.3 -1% ---------------------- Total 1,601.9 1,508.9 6% EMEA Region Footwear 679.5 685.1 -1% Apparel 487.0 435.2 12% Equipment 104.4 97.2 7% ---------------------- Total 1,270.9 1,217.5 4% Asia Pacific Region Footwear 266.0 237.4 12% Apparel 200.9 176.5 14% Equipment 51.5 45.7 13% ---------------------- Total 518.4 459.6 13% Americas Region Footwear 172.3 156.9 10% Apparel 51.2 40.7 26% Equipment 19.0 16.1 18% ---------------------- Total 242.5 213.7 13% 3,633.7 3,399.7 7% Other 560.4 462.3 21% Total NIKE, Inc. Revenues $4,194.1 $3,862.0 9%
NIKE, INC QUARTER ENDING Pre-tax Income1,* 08/31/2006 08/31/2005 %Chg =================================================================================== U.S. Region $ 338.9 $ 345.2 -2% EMEA Region 302.5 330.2 -8% Asia Pacific Region 98.9 91.4 8% Americas Region 48.4 44.6 9% Other 87.9 40.0 120% Corporate2 (300.8) (191.4) -57% ---------------------- Total Pre-tax Income1 $ 575.8 $ 660.0 -13% _____________________ 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 "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.
NIKE, INC NET INCOME AND DILUTED QUARTER ENDING EPS RECONCILIATION1,* 08/31/2006 08/31/2005 %Chg =================================================================================== Net income, as reported $ 377.2 $ 432.3 -13% Exclude: Stock-based compensation expense, net of tax2 40.8 -- -- _________________________ Net income, excluding stock-based compensation2 expense $ 418.0 $ 432.3 -3% ========================= Diluted EPS, as reported $ 1.47 $ 1.61 -9% Diluted EPS, excluding stock-based compensation expense2 $ 1.63 $ 1.61 1% _____________________ 1 This schedule is intended to satisfy the quantitative reconciliation for non-GAAP financial measures in accordance with Regulation G of the Securities and Exchange Commission. 2 This charge relates to stock compensation expensed in accordance with stock options and ESPP purchase rights issued to employees and expensed in accordance with SFAS 123(R) "Share Based Payment", which was adopted by the Company during its first fiscal quarter ended August 31, 2006.
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