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): June 24, 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 June 24, 2004
Item 12. Results of Operations and Financial Condition).
Today NIKE, Inc. issued its fourth 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: June 24, 2004
__________________________
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 RECORD FINANCIAL RESULTS:
FULL YEAR EARNINGS PER SHARE REACH $3.51;
FULL YEAR REVENUES EXCEED $12 BILLION;
WORLDWIDE FUTURES ORDERS INCREASE 10.7 PERCENT.
Highlights:
- Full year earnings per diluted share were $3.51, up 27 percent
before prior year accounting change; fourth quarter earnings per
diluted share increased 23 percent to $1.13
- Full year revenues increased 15 percent to $12.3 billion; fourth
quarter revenues increased 17 percent to $3.5 billion
- Company achieved highest gross margin level in history for the
fourth quarter and full year
- Worldwide futures orders increased 10.7 percent
- Completed $1 billion share repurchase program implemented in 2000;
authorized new 4-year, $1.5 billion plan
Beaverton, OR (June 24, 2004) -- NIKE, Inc. (NYSE:NKE) today reported
revenues and earnings for the Company's fourth quarter and fiscal year
ended May 31, 2004. Fourth quarter revenues increased 17 percent to $3.5
billion, versus $3.0 billion for the same period last year. Seven
percentage points of this growth were the result of changes in currency
exchange rates. Fourth quarter net income totaled $305.0 million, or
$1.13 per diluted share, compared to $246.2 million, or $0.92 per diluted
share in the prior year.
For the fiscal year ended May 31, 2004, revenues increased 15 percent to
$12.3 billion, compared to $10.7 billion in fiscal year 2003. Changes in
currency exchange rates contributed seven percentage points of this
growth. Full year net income totaled $945.6 million, or $3.51 per
diluted share, versus $740.1 million before accounting change, or $2.77
per diluted share, in 2003. After a one-time charge from the cumulative
effect of implementing Financial Accounting Standards Board Statement 142
(Goodwill and Other Intangible Assets), the Company posted net income of
$474.0 million, or $1.77 per diluted share in 2003.
Philip H. Knight, Chairman and Chief Executive Officer said, "It was a
great year for the Nike brand around the world, complemented by
outstanding results across our brand portfolio and the acquisition of
Converse. We managed the business well, recording our highest gross
margins ever and generating tremendous cash flow. But, most
importantly," Knight added, "we focused on doing what we do best:
creating energy and excitement through innovative new products and strong
connections with consumers. As a result, Nike, Inc. posted its strongest
revenue and earnings per share growth in five years, delivering 15 and
27* percent increases, respectively."
Knight continued, "It was also a great year for Nike shareholders.
Nike's stock price increased 27% for fiscal year 2004. During the year
we raised our quarterly dividend over 40%, and in the fourth
quarter, we completed our four-year $1 billion share repurchase program.
Over the past four years, Nike has returned $1.6 billion to shareholders
through share repurchases and dividends. And I'm pleased to announce
that our Board has authorized a new four-year, $1.5 billion share
repurchase program, reflecting confidence in our ability to continue to
deliver strong cash flows in the future."**
Futures Orders
The Company reported worldwide futures orders for athletic footwear and
apparel, scheduled for delivery between June and November 2004, totaling
$5.5 billion, 10.7 percent higher than such orders reported for the same
period last year. One point of this growth was due to changes in
currency exchange rates.**
By region, U.S. futures were up 10 percent; Europe increased nine
percent; Asia Pacific grew 21 percent; and the Americas increased four
percent. Changes in currency exchange rates had a favorable impact of
three percentage points in Europe and two percentage points in Asia
Pacific. The Americas orders included a six percentage point decline due
to changes in currency exchange rates.**
Knight said, "Nike's brand momentum was clearly evident in our futures
results, which reached their highest level in seven years. All of our
regions posted healthy futures increases in both footwear and apparel,
but we're particularly encouraged by results in the U.S. The region
reported its strongest footwear futures growth in eight years."**
Regional Highlights
USA
___
During the fourth quarter, U.S. revenues increased six percent to $1.3
billion. U.S. athletic footwear revenues increased seven percent to
$851.2 million. Apparel revenues grew four percent to $359.4 million.
Equipment revenues increased two percent to $74.1 million.
For the full fiscal year, USA revenues were up three percent to $4.8
billion. Footwear revenues increased two percent to $3.1 billion; apparel
revenues grew six percent to $1.4 billion; and equipment revenues grew
one percent to $289.8 million.
Europe
______
Quarterly revenues for the European region (which includes the Middle
East and Africa) grew 16 percent to $1.1 billion. Fourteen percentage
points of this growth were the result of changes in currency exchange
rates. Footwear revenues increased five percent to $632.0 million,
apparel revenues increased 33 percent to $382.9 million and equipment
revenues increased 43 percent to $77.1 million.
For the full year, European revenues grew 18 percent to $3.8 billion,
compared to $3.2 billion last year. Sixteen percentage points of this
growth were the result of changes in currency exchange rates. Footwear
revenues were up 18 percent to $2.2 billion. Apparel revenues increased
18 percent to $1.3 billion and equipment revenues rose 26 percent to
$268.4 million.
Asia Pacific
____________
In the Asia Pacific Region, quarterly revenues grew 25 percent to $450.0
million. Ten percentage points of this growth were the result of changes
in currency exchange rates. Footwear revenues were up 20 percent to
$232.7 million; apparel revenues increased 32 percent to $174.4 million
and equipment revenues grew 30 percent to $42.9 million.
Full-year Asia Pacific revenues increased 20 percent to $1.6 billion,
compared to $1.3 billion last year. Eight percentage points of this
growth were the result of changes in currency exchange rates. Footwear
revenues increased 17 percent to $855.3 million. Apparel revenues were up
23 percent to $612.3 million. Equipment revenues increased 21 percent to
$145.8 million.
Americas
________
Quarterly revenues in the Americas region increased 25 percent to $180.0
million. This growth rate reflected a nine percentage point increase due
to changes in currency exchange rates. Footwear revenues were up 26
percent to $116.0 million, apparel revenues increased 24 percent to $48.5
million and equipment revenues increased 25 percent to $15.5 million.
For the full year, Americas revenues increased 19 percent to $624.8
million, compared to $527.0 million last year. Eight percentage points of
this growth were the result of changes in currency exchange rates.
Footwear revenues increased 22 percent to $412.0 million, apparel
revenues grew 12 percent to $165.8 million and equipment revenues
increased 13 percent to $47.0 million.
Other Revenues
______________
In the fourth quarter, other revenues, which include Nike Golf, Converse,
Inc., Bauer NIKE Hockey Inc., Cole Haan(registered), and Hurley
International LLC, grew 50 percent to $480.4 million. For the full year,
other revenues increased 51 percent to $1.4 billion. The acquisition of
Converse accounted for 28 and 24 percentage points of this increase for
the quarter and year, respectively.
Income Statement Review
In the fourth quarter, gross margins were 43.8 percent of revenue
compared to 41.5 percent last year. For the full year, gross margins were
42.9 percent compared to 41.0 percent last year. Selling and
administrative expenses were 29.8 percent of fourth quarter revenues,
compared to 27.8 percent last year. For the full year, selling and
administrative expenses were 30.2 percent of full year revenues versus
29.5 percent last year. The effective tax rate was 34.8 percent for the
fourth quarter and the full year.
Balance Sheet Review
At fiscal year-end, global inventories stood at $1.6 billion, an increase
of 8 percent from last year. Cash and short-term investments were
$1.2 billion at fiscal year-end, compared to $634.0 million last
year.
Share Repurchase
During the quarter, the Company purchased a total of 2,282,692 shares for
approximately $171 million, completing the $1 billion share repurchase
program that was approved by the Board of Directors in June 2000.
Effective today, the Board authorized a new four-year, $1.5 billion
program.
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 years accounting change and restructuring charge.
**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 MAY 31, 2004
(In millions, except per share data)
INCOME QUARTER ENDING YEAR TO DATE ENDING
STATEMENT* 05/31/2004 05/31/2003 %Chg 05/31/2004 05/31/2003 %Chg
====================================================== ============================
Revenues $3,487.1 $2,985.1 17% $12,253.1 $10,697.0 15%
Cost of Sales 1,958.4 1,744.9 12% 7,001.4 6,313.6 11%
Gross Profit 1,528.7 1,240.2 23% 5,251.7 4,383.4 20%
% of revenue 43.8 % 41.5 % 42.9 % 41.0 %
SG&A 1,037.9 829.5 25% 3,702.0 3,154.1 17%
% of revenue 29.8 % 27.8 % 30.2 % 29.5 %
Interest Expense 3.9 7.4 -47% 25.0 28.8 -13%
Other 19.4 31.4 -38% 74.7 77.5 -4%
----------------------- ----------------------
Income before income
taxes and cumulative
effect of accounting
change 467.5 371.9 26% 1,450.0 1,123.0 29%
Income Taxes 162.5 125.7 29% 504.4 382.9 32%
34.8 % 33.8 % 34.8 % 34.1 %
Income be cumulative
effect of accounting
change 305.0 246.2 24% 945.6 740.1 28%
Cumulative effect of
accounting change, net
of income taxes - - - 266.1
----------------------- ----------------------
Net Income $305.0 $246.2 24% $945.6 $474.0 99%
======================= ======================
Diluted EPS - before
accounting change $1.13 $0.92 23% $3.51 $2.77 27%
Cumulative effect of
accounting change - - - (1.00)
----------------------- ----------------------
$1.13 $0.92 23% $3.51 $1.77 98%
======================= ======================
Basic EPS - before
accounting change $1.16 $0.93 25% $3.59 $2.80 28%
Cumulative effect of
accounting change - - - (1.01)
----------------------- ----------------------
$1.16 $0.93 25% $3.59 $1.79 101%
======================= ======================
Weighted Average Common Shares Outstanding:
Diluted 270.8 267.6 269.7 267.6
Basic 263.2 264.0 263.2 264.5
======================= =======================
Dividend $0.20 $0.14 $0.74 $0.54
======================= =======================
*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* 05/31/2004 05/31/2003
==================================================
ASSETS
Cash & Investments $828.0 $634.0
Short-term Investments 400.8 -
Accounts Receivable 2,120.2 2,083.9
Inventory 1,633.6 1,514.9
Deferred Taxes 165.0 221.8
Prepaid Expenses 364.4 332.5
Current Assets 5,512.0 4,787.1
Fixed Assets 3,132.3 2,988.8
Depreciation 1,545.4 1,368.0
Net Fixed Assets 1,586.9 1,620.8
Identifiable Intangible
Assets and Goodwill 501.7 183.8
Other Assets 291.0 229.4
------------------------
Total Assets $7,891.6 $6,821.1
========================
LIAB AND EQUITY
Current Long-Term Debt $ 6.6 $205.7
Payable to Banks 146.0 75.4
Accounts Payable 763.8 572.7
Accrued Liabilities 974.4 1,036.2
Income Taxes Payable 118.2 130.6
Current Liabilities 2,009.0 2,020.6
Long-term Debt 682.4 551.6
Def Inc Taxes & Oth Liab 418.2 257.9
Preferred Stock 0.3 0.3
Common Equity 4,781.7 3,990.7
------------------------
Total Liab. & Equity $7,891.6 $6,821.1
========================
NIKE, INC QUARTER ENDING YEAR TO DATE ENDING
Divisional Revenues* 05/31/2004 05/31/2003 %Chg 05/31/2004 05/31/2003 %Chg
===================================================== ============================
USA Region
Footwear $851.2 $797.0 7% $3,070.4 $3,019.5 2%
Apparel 359.4 345.7 4% 1,433.5 1,351.0 6%
Equipment and other 74.1 72.6 2% 289.8 287.9 1%
---------------------- ----------------------
Total 1,284.7 1,215.3 6% 4,793.7 4,658.4 3%
EMEA Region
Footwear 632.0 603.5 5% 2,232.2 1,896.0 18%
Apparel 382.9 288.0 33% 1,333.8 1,133.1 18%
Equipment and other 77.1 53.8 43% 268.4 212.6 26%
---------------------- ----------------------
Total 1,092.0 945.3 16% 3,834.4 3,241.7 18%
Asia Pacific Region
Footwear 232.7 194.3 20% 855.3 730.6 17%
Apparel 174.4 132.2 32% 612.3 497.8 23%
Equipment and other 42.9 32.9 30% 145.8 120.8 21%
---------------------- ----------------------
Total 450.0 359.4 25% 1,613.4 1,349.2 20%
Americas Region
Footwear 116.0 92.2 26% 412.0 337.3 22%
Apparel 48.5 39.2 24% 165.8 148.1 12%
Equipment and other 15.5 12.4 25% 47.0 41.6 13%
---------------------- ----------------------
Total 180.0 143.8 25% 624.8 527.0 19%
3,006.7 2,663.8 13% 10,866.3 9,776.3 11%
Other Brands 480.4 321.3 50% 1,386.8 920.7 51%
Total NIKE Inc. Revenues $3,487.1 $2,985.1 17% $12,253.1 $10,697.0 15%