SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
FOR QUARTERLY REPORTS UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
For the Quarter Ended February 28, 1998 Commission file number - 1-10635
NIKE, Inc.
(Exact name of registrant as specified in its charter)
OREGON 93-084541
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Bowerman Drive, Beaverton, Oregon 97005-6453
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (503) 671-6453
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days
Yes X No .
___ ___
Common Stock shares outstanding as of February 28, 1998 were:
Class A 101,481,308
Class B 186,245,961
___________
287,727,269
===========
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
NIKE, Inc.
CONDENSED CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
Feb. 28, May 31,
1998 1997
________ _______
(in thousands)
ASSETS
<S> <C> <C>
Current assets:
Cash and equivalents $ 150,280 $ 445,421
Accounts receivable 1,809,830 1,754,137
Inventories (Note 3) 1,566,099 1,338,640
Deferred income taxes 138,008 135,663
Prepaid expenses 228,815 157,058
_________ _________
Total current assets 3,893,032 3,830,919
__________ __________
Property, plant and equipment 1,710,068 1,425,747
Less accumulated depreciation 618,549 503,378
__________ __________
1,091,519 922,369
Identifiable intangible assets and goodwill 449,718 464,191
Deferred income taxes and other assets 203,834 143,728
__________ __________
$5,638,103 $5,361,207
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 1,960 $ 2,216
Notes payable 629,665 553,153
Accounts payable 471,575 687,121
Accrued liabilities 674,179 570,504
Income taxes payable 59,369 53,923
__________ __________
Total current liabilities 1,836,748 1,866,917
Long-term debt (Note 6) 385,311 296,020
Deferred income taxes and other liabilities 41,167 42,132
Commitments and contingencies (Note 4) - -
Redeemable Preferred Stock 300 300
Shareholders' equity:
Common Stock at stated value (Note 2):
Class A convertible-101,481 and
101,711 shares outstanding 151 152
Class B-186,246 and 187,559 shares
outstanding 2,704 2,706
Capital in excess of stated value 250,288 210,650
Foreign currency translation
adjustment (61,966) (31,333)
Retained earnings 3,183,400 2,973,663
__________ __________
3,374,577 3,155,838
__________ __________
$5,638,103 $5,361,207
========== ==========
</TABLE>
The accompanying Notes to Condensed Consolidated Financial Statements are
an integral part of this statement.
NIKE, Inc.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
February 28, February 28,
__________________ __________________
1998 1997 1998 1997
____ ____ ____ ____
(in thousands, except per share data)
<S> <C> <C> <C> <C>
Revenues $2,223,995 $2,423,648 $7,245,366 $6,812,608
_________ _________ _________ _________
Costs and expenses:
Costs of sales 1,428,849 1,435,427 4,503,836 4,075,174
Selling and administrative 651,378 577,579 1,903,338 1,637,569
Interest expense 13,167 15,793 47,222 38,687
Other (income)/expense, net 7,983 7,716 27,473 16,210
_________ _________ _________ _________
2,101,377 2,036,515 6,481,869 5,767,640
_________ _________ _________ _________
Income before income taxes 122,618 387,133 763,497 1,044,968
Income taxes 49,500 150,000 296,200 404,900
_________ _________ _________ _________
Net income $ 73,118 $ 237,133 $ 467,297 $ 640,068
========= ========= ========= =========
Earnings per share of common stock $ 0.25 $ 0.82 $ 1.61 $ 2.22
Earnings per share of common stock-
assuming dilution $ 0.25 $ 0.80 $ 1.58 $ 2.16
Dividends declared per common share $ 0.12 $ 0.10 $ 0.34 $ 0.28
</TABLE>
The accompanying Notes to Condensed Consolidated Financial Statements are
an integral part of this statement.
NIKE, Inc.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended
February 28,
_________________
1998 1997
____ ____
(in thousands)
<S> <C> <C>
Cash provided (used) by operations:
Net income $ 467,297 $ 640,068
Income charges (credits) not
affecting cash:
Depreciation 132,980 94,777
Deferred income taxes (6,720) (13,806)
Other 26,075 18,892
Changes in other working capital
components (458,899) (683,128)
________ ________
Cash provided by operations 160,733 56,803
________ ________
Cash provided (used) by investing activities:
Additions to property, plant and
equipment (352,110) (317,580)
Disposals of property, plant and
equipment 10,581 23,218
Increase in other assets (59,505) (55,626)
Decrease in other liabilities (17,803) (10,859)
________ ________
Cash used by investing activities (418,837) (360,847)
________ ________
Cash provided (used) by financing activities:
Additions to long-term debt 101,435 300,135
Reductions in long-term debt (1,715) (11,044)
Increase in notes payable 76,512 67,166
Proceeds from exercise of options 24,405 18,133
Repurchase of stock (151,985) --
Dividends paid - common and preferred (92,780) (71,991)
________ ________
Cash (used) provided by financing
activities (44,128) 302,399
________ ________
Effect of exchange rate changes on cash 7,091 (2,675)
________ ________
Effect of May 1996 Cash Flow Activity for certain
subsidiaries (Note 5) -- 43,004
________ ________
Net (decrease) increase in cash and equivalents (295,141) 38,684
Cash and equivalents, May 31, 1997 and 1996 445,421 262,117
________ ________
Cash and equivalents February 28, 1998
and 1997 $ 150,280 $ 300,801
======== ========
</TABLE>
The accompanying Notes to Condensed Consolidated Financial Statements are
an integral part of this statement.
NIKE, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - Summary of significant accounting policies:
___________________________________________
Basis of Presentation:
The accompanying unaudited condensed consolidated financial
statements reflect all adjustments (consisting of normal recurring
accruals) which are, in the opinion of management, necessary for a fair
presentation of the results of operations for the interim period(s).
The interim financial information and notes thereto should be read in
conjunction with the Company's latest annual report to shareholders.
The results of operations for the three and nine months ended February
28, 1998 are not necessarily indicative of results to be expected for the
entire year.
NOTE 2 - Net income per common share:
___________________________
SFAS 128, "Earnings per Share," replaces primary and fully diluted
earnings per share with basic and diluted earnings per share. Under the
new requirements, the dilutive effect of stock options is excluded from
the calculation of basic earnings per share. Diluted earnings per share
is calculated similarly to fully diluted earnings per share as required
under APB 15. SFAS 128 became effective for the Company's 1998 third
quarter financial statements. All prior period earnings per share data
presented have been restated to conform to the provisions of this
statement. The following represents a reconciliation from basic earnings
per share to diluted earnings per share:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
February 28, February 28,
__________________ __________________
1998 1997 1998 1997
____ ____ ____ ____
(in thousands, except per share data)
<S> <C> <C> <C> <C>
Determination of shares:
Weighted average common shares
outstanding 287,585 288,568 289,292 288,183
Assumed conversion of stock options 5,600 8,800 6,524 8,732
_________ _________ _________ _________
Weighted average common shares outstanding-
assuming dilution 293,185 297,368 295,816 296,915
========= ========= ========= =========
Earnings per share of common stock $ 0.25 $ 0.82 $ 1.61 $ 2.22
Earnings per share of common stock-
assuming dilution $ 0.25 $ 0.80 $ 1.58 $ 2.16
</TABLE>
During the second quarter of fiscal year 1997, the Company issued
additional shares in connection with a two-for-one stock split effected
in the form of a 100% stock dividend on outstanding Class A and Class B
common stock. The per common share amounts in the Consolidated Financial
Statements and accompanying notes have been adjusted to reflect this
stock split.
NOTE 3 - Inventories:
___________
Inventories by major classification are as follows:
Feb. 28, May 31,
1998 1997
________ ________
(in thousands)
Finished goods $1,475,497 $1,248,401
Work-in-process 43,401 50,245
Raw materials 47,201 39,994
_________ ________
$1,566,099 $1,338,640
========= =========
NOTE 4 - Commitments and contingencies:
_____________________________
There have been no other significant subsequent developments
relating to the commitments and contingencies reported on the
Company's most recent Form 10-K.
NOTE 5 - Change in year-end of certain subsidiaries:
__________________________________________
Prior to fiscal year 1997, certain of the Company's non-U.S.
operations reported their results of operations on a one month lag
which allowed more time to compile results. Beginning in the first
quarter of fiscal year 1997, the one month lag was eliminated. As a
result, the May 1996 charge from operations for these entities of
$4.1 million was recorded to retained earnings in the first
quarter of fiscal year 1997.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
Operating Results
_________________
Net income for the third quarter of fiscal year 1998 decreased 69% to
$73.1 million, or $0.25 per diluted share, compared to $237.1 million,
or $0.80 per diluted share last year. Year to date, net income decreased
27%. Revenues decreased 8% for the quarter, while increasing 6% on a
year-to-date basis. For the quarter, gross margins decreased to 35.8%
compared to 40.8% last year. Year-to-date margins were 37.8% compared to
40.2% in the prior year. Selling and administrative expenses increased as
a percentage of revenue to 29.3% for the quarter and 26.3% year-to-date,
compared to 23.8% and 24.0% for the previous year's quarter and
year-to-date, respectively. The Company's results of operations for the
quarter and nine months ended February 28, 1998 are most significantly a
result of lower growth rates in the U.S. and Asia Pacific regions. In
the U.S., both footwear and apparel revenues declined in the quarter,
primarily due to the saturation of retail athletic footwear and apparel
markets. In Asia Pacific, the recent economic crisis in key markets in
that region has resulted in reduced consumer spending.
The Company is currently undergoing a cost evaluation initiative and
will incur a restructuring charge of between $125 and $175 million in the
fourth quarter of fiscal 1998. Included in the charge will be charges
associated with the reduction in the Company's global workforce, lease
abandonments, asset write-downs and other costs. These measures, combined
with the Company's efforts to maintain an efficient cost structure in the
face of a difficult short-term market in the U.S. and Asia Pacific, are
expected to result in projected reduced spending in excess of $100
million in fiscal 1999.
For the quarter ended February 28, 1998, total revenues decreased $199.7
million and increased $432.8 million year-to-date. U.S. brand revenues
decreased 15% and 1% for the quarter and year-to-date, respectively.
U.S. footwear revenue declines were the primary reason, with revenue down
18% for the quarter and 5% year-to-date. The decrease for the quarter
was due to a 9% decrease in pairs sold and an 11% average reduction in
selling price. While most core footwear categories experienced decreases
for the quarter, the three largest category increases were in golf
(up 117%), soccer (up 80%), and Brand Jordan (up 125%). U.S. apparel
revenues decreased 5% for the quarter, but increased 10% on a year-to-date
basis. For the quarter, golf was up 55% while the core apparel categories
of training and basketball were down 10% and 22%, respectively.
Non-U.S. brand revenues decreased 1% for the quarter and increased
18% year-to-date. Had the dollar remained constant with that of the
prior year, non-U.S. revenues would have increased 9% for the quarter
and 29% year-to-date. Europe increased 4% for the quarter (11% on a
constant dollar basis) with footwear down 12% and apparel up 35%.
The top five countries in the region, which represent 64% and 67% of the
total revenue for the quarter and year-to-date, respectively, increased
5% for the quarter and 13% for the year. Italy, France and Spain all had
double digit growth in constant dollars. The Asia Pacific region
decreased 17% for the quarter (down 2% on a constant dollar basis).
Footwear revenues in the region were down 26%, while apparel increased 6%.
Japan, which a year ago had increased 107% quarter on quarter, had flat
revenues operationally, and was down 10% including the effect of exchange
rates. The Americas region, which includes Latin America and Canada,
increased 27% for the quarter (32% on a constant dollar basis) and both
footwear and apparel revenues increased to 14% and 72%, respectively.
Other and Other Brands, which includes NIKE brand equipment, Bauer Inc.,
Cole Haan, Sports Specialties, and Tetra Plastics, increased 6% to $118.3
million for the third quarter and 5% to $425.3 million year-to-date. The
increase was due to NIKE brand equipment partially offset by a decline
in the Other Brands.
The breakdown of revenues follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
February 28, February 28,
1998 1997 % Change 1998 1997 % Change
____ ____ _____ ____ ____ ______
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
U.S. Footwear $ 800,410 $ 980,369 -18% $2,644,077 $2,796,823 -5%
U.S. Apparel 330,958 348,702 -5% 1,174,459 1,067,474 10%
_________ _________ _________ _________
Total United States 1,131,368 1,329,071 -15% 3,818,536 3,864,297 -1%
Non-U.S. Footwear 595,433 689,064 -14% 1,910,215 1,754,831 9%
Non-U.S. Apparel 378,857 293,821 29% 1,091,303 788,181 38%
_________ _________ _________ _________
Total Non-U.S. 974,290 982,885 -1% 3,001,518 2,543,012 18%
Other & Other Brands 118,337 111,692 6% 425,312 405,299 5%
_________ _________ _________ _________
Total Revenues $2,223,995 $2,423,648 -8% $7,245,366 $6,812,608 6%
========= ========= ==== ========= ========= ===
</TABLE>
The overall decrease in gross margin as a percentage of revenues for
both the quarter and year-to-date, compared to the prior year, was due
to four principal factors. First was the increase in close-out product
sales compared to the prior year. The regions most affected by this
were the U.S. and Asia Pacific. Second, inventory reserves increased
to write down slow-moving inventory that has been unable to be sold in
the marketplace. Third, the strengthening of the U.S. dollar has had a
direct impact on the Company's ability to price product in competitive
markets. Finally, increased levels of warehousing, royalties, and
research and development costs have had the effect of lowering margins
due to the smaller revenue base. Management expects that the gross
margin percentage for fiscal 1998 will continue to be below levels
experienced in the prior year.
Selling and administrative expenses increased $73.8 million over the
previous year's third quarter and $265.8 million year-to-date. The
increases are due to higher levels of marketing expenses, including
spending in the third quarter surrounding the Winter Olympics and
endorsement contracts. Infrastructure spending has also increased,
however wage-related increases over the prior year are beginning to slow
down as cost-cutting measures take effect. Selling and administrative
expenses are expected to remain higher than last year's levels, as a
percentage of revenue, through the end of fiscal 1998.
Interest expense, while down for the third quarter, increased on a
year-to-date basis due to increased debt, both short and long-term, for
growing infrastructure and financing increased levels of inventory.
Other expense has increased on a year-to-date basis, primarily due to
decreased interest income and increased losses on foreign transactions,
offset by decreased profit sharing expense.
The Company's effective tax rate for the quarter was 40.4% compared
to 38.75% in the prior year. Year-to-date the rate has risen to 38.8%
compared to 38.7%. The increase in the rate is primarily due to a lower
mix of non-U.S. earnings to total.
Worldwide futures and advance orders for NIKE brand athletic footwear
and apparel scheduled for delivery from March 1998 through July 1998
totaled $4.0 billion, 9% lower than such orders for the same period last
year. These orders and the percentage change in these orders are not
necessarily indicative of the change in revenues which the Company will
experience for subsequent periods. This is due to potential shifts in
the mix of advance orders in relation to at once orders and varying
cancellation rates. Finally exchange rate fluctuations will also cause
differences in the comparisons.
LIQUIDITY AND CAPITAL RESOURCES
_______________________________
The Company's financial position remains strong at February 28, 1998.
Compared to May 31, 1997, total assets increased $277 million to $5.6
billion while shareholder's equity increased $219 million to $3.4
billion. Working capital increased $92 million, to $2.1 billion at
February 28, 1998, and the Company's current ratio was unchanged
from fiscal year-end at 2.1. The increase in working capital is
primarily a result of higher inventory levels due to the slow down in
revenue growth. The Company has taken steps to reduce inventory levels.
These include actions to sell close-out inventory as well as to moderate
inventory purchases to more cautiously match up with futures orders and
at-once demand.
Cash provided by operations was $161 million for the nine months ended
February 28,1998, an increase of $104 million over last year's first nine
months, primarily due to decreased working capital requirements as a
result of lower growth rates compared to the first nine months of
fiscal 1997.
Additions to property, plant and equipment for the first nine months of
fiscal 1998 were $352 million compared to $318 million for the same
period last year. Additions in the U.S. totaled $158 million due to
continued overall expansion of U.S. operations which includes warehouse
locations, world headquarters expansion, management information systems
and the continued development of retail locations. Outside the U.S.,
additions totaled $181 million due to the development and expansion of
new and existing warehouse facilities as well as the development of
retail locations. The Company expects total capital expenditures for
fiscal 1998 to be approximately $550 million.
Additions to long-term debt totaled $101 million for the first nine
months of fiscal 1998. In fiscal 1997 the Company filed a shelf
registration with the Securities and Exchange Commission for the sale
of up to $500 million of debt securities. Under this program, the
Company issued $100 million medium term notes in the first quarter of
fiscal 1998, maturing in three and five years. The proceeds were swapped
into Dutch Guilders and the Company used this long-term fixed rate debt
financing, in addition to excess cash, to retire the Company's Dutch
Guilder external short-term debt. Management believes that significant
funds generated by operations, together with access to sufficient sources
of funds, will adequately meet its anticipated operating, global
infrastructure expansion and capital needs. Significant short and
long-term lines of credit are maintained with banks which, along with
cash on hand, provide adequate operating liquidity. Liquidity is also
provided by the Company's commercial paper program, under which there was
$328 million outstanding at February 28, 1998.
During the quarter, the Company purchased a total of 2.7 million shares
of NIKE's Class B common stock for $123.2 million, completing the $450
million program approved in July 1993 and beginning the four-year, $1
billion program approved in December 1997. In the quarter, 2.4 million
shares were purchased under the July 1993 program for $108.2 million.
Total shares purchased since July 1993 were 23.8 million. Under the new
$1 billion program, the Company purchased a total of 355,000 shares for
$15.0 million. Funding has, and is expected to continue to, come from
operating cash flow in conjunction with short-term borrowings. The timing
and the amount of shares purchased will be dictated by working capital
needs and stock market conditions.
Special Note Regarding Forward-Looking Statements
and Reports Analyst Reports
Certain written and oral statements made or incorporated by
reference from time to time by NIKE or its representatives in this
report, other reports, filings with the Securities and Exchange
Commission, press releases, conferences, or otherwise, are "forward-
looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 ("the Act"). Forward-looking statements
include, without limitation, any statement that may predict, forecast,
indicate, or imply future results, performance, or achievements, and may
contain the words "believe," "anticipate," "expect," "estimate,"
"project," "will be," "will continue," "will likely result," or words or
phrases of similar meaning. Forward-looking statements involve risks
and uncertainties which may cause actual results to differ materially
from the forward-looking statements. The 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, and include, among others, the
following: international, national and local general economic and
market conditions; the size and growth of the overall athletic footwear,
apparel, and equipment markets; intense competition among designers,
marketers, distributors and sellers of athletic footwear, apparel, and
equipment for consumers and endorsers; demographic changes; changes in
consumer preferences; popularity of particular designs, categories of
products, and sports; seasonal and geographic demand for NIKE products;
the size, timing and mix of purchases of NIKE's products; fluctuations
and difficulty in forecasting operating results, including, without
limitation, the fact that advance "futures" orders may not be indicative
of future revenues due to the changing mix of futures and at-once
orders; the ability of NIKE to sustain, manage or forecast its growth;
new product development and introduction; the ability to secure and
protect trademarks, patents, and other intellectual property;
performance and reliability of products; customer service; adverse
publicity; the loss of significant customers or suppliers; dependence on
distributors; business disruptions; increased costs of freight and
transportation to meet delivery deadlines; changes in business strategy
or development plans; general risks associated with doing business
outside the United States, including, without limitation, import duties,
tariffs, quotas and political instability; changes in government
regulations; liability and other claims asserted against NIKE; the
ability to attract and retain qualified personnel; and other factors
referenced or incorporated by reference in this report and other
reports.
The risks included here are not exhaustive. Other sections of this
report may include additional factors which could adversely impact
NIKE's business and financial performance. Moreover, NIKE operates in a
very competitive and rapidly changing environment. New risk factors
emerge from time to time and it is not possible for management to
predict all such risk factors, nor can it assess the impact of all such
risk factors on NIKE's business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially
from those contained in any forward-looking statements. Given these
risks and uncertainties, investors should not place undue reliance on
forward-looking statements as a prediction of actual results.
Investors should also be aware that while NIKE does, from time to
time, communicate with securities analysts, it is against NIKE's policy
to disclose to them any material non-public information or other
confidential commercial information. Accordingly, shareholders should
not assume that NIKE agrees with any statement or report issued by any
analyst irrespective of the content of the statement or report.
Furthermore, NIKE has a policy against issuing or confirming financial
forecasts or projections issued by others. Accordingly, to the extent
that reports issued by securities analysts contain any projections,
forecasts or opinions, such reports are not the responsibility of NIKE.
Part II - Other Information
Item 1. Legal Proceedings:
There have been no material changes from the information previously
reported under Item 3 of the Company's Annual Report on Form 10-K for
the fiscal year ended May 31, 1997.
Item 6. Exhibits and Reports on Form 8-K:
(a) EXHIBITS:
3.1 Restated Articles of Incorporation, as amended (incorporated by
reference from Exhibit 3.1 to the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended August 31, 1995).
3.2 Third Restated Bylaws, as amended (incorporated by reference
from Exhibit 3.2 to the Company's Quarterly Report on Form 10-Q for
the fiscal quarter ended August 31, 1995).
4.1 Restated Articles of Incorporation, as amended (see Exhibit 3.1).
4.2 Third Restated Bylaws, as amended (see Exhibit 3.2).
4.3 Form of Indenture between the Company and The First National Bank
of Chicago, as Trustee (incorporated by reference from Exhibit
4.01 to Amendment No. 1 to Registration Statement No. 333-15953)
filed by the Company on November 26, 1996.
4.4 Officers' Certificate establishing the terms of the Company's
6-3/8% Notes Due December 1, 2003 (incorporated by reference
from Exhibit 4.1 to the Company's Current Report on Form 8-K
dated December 10, 1996).
4.5 Form of 6-3/8% Note due December 1, 2003 (incorporated by
reference from Exhibit 4.2 to the Company's Current Report on
Form 8-K dated December 10, 1996).
4.6 Form of Officers' Certificate establishing the terms of
the Company's Fixed Rate Medium-Term Note and Floating Rate
Medium-Term Note (incorporated by reference from Exhibit 4.1
to the Company's Current Report on Form 8-K dated April 23, 1997).
4.7 Form of Fixed Rate Medium-Term Note (incorporated by reference
from Exhibit 4.2 to the Company's Current Report on Form 8-K
dated April 23, 1997).
4.8 Form of Floating Rate Medium-Term Note (incorporated by reference
from Exhibit 4.3 to the Company's Current Report on Form 8-K
dated April 23, 1997).
10.1 Credit Agreement dated as of September 15, 1995 among NIKE, Inc.,
Bank of America National Trust & Savings Association,
individually and as Agent, and the other banks party thereto
(incorporated by reference from the Company's Quarterly Report
on Form 10-Q for the fiscal quarter ended August 31, 1995).
10.2 Form of non-employee director Stock Option Agreement (incorporated
by reference from Exhibit 10.3 to the Company's Annual Report on
Form 10-K for the fiscal year ended May 31, 1993).*
10.3 Form of Indemnity Agreement entered into between the Company and
each of its officers and directors (incorporated by reference from
the Company's definitive proxy statement filed in connection with
its annual meeting of shareholders held on September 21, 1987).
10.4 NIKE, Inc. Restated Employee Incentive Compensation Plan
(incorporated by reference from Registration Statement No.
33-29262 on Form S-8 filed by the Company on June 16, 1989).*
10.5 NIKE, Inc. 1990 Stock Incentive Plan (incorporated by reference
from the Company's definitive proxy statement filed in connection
with its annual meeting of shareholders held on September 22,
1997).*
10.6 NIKE, Inc. Long-Term Incentive Plan (incorporated by reference
from the Company's definitive proxy statement filed in connection
with its annual meeting of shareholders held on September 22,
1997).*
10.7 Collateral Assignment Split-Dollar Agreement between NIKE, Inc.
and Philip H. Knight dated March 10, 1994 (incorporated by
reference from Exhibit 10.7 to the Company's Annual Report on
Form 10-K for he fiscal year ended May 31, 1994).*
10.8 NIKE, Inc. Executive Performance Sharing Plan (incorporated
by reference from the Company's definitive proxy statement filed
in connection with its annual meeting of shareholders held on
September 18, 1995).*
12.1 Computation of Ratio of Earnings to Charges.
27 Financial Data Schedule.
* Management contract or compensatory plan or arrangement.
(b) The following reports on Form 8-K were filed by the Company
during the third quarter of fiscal 1998:
February 26, 1998 Item 5. Other Events Press release issued on
February 22 and 24, 1998
regarding VP resignation
and earnings.
January 9, 1998 Item 5. Other Events Press release regarding
resignation of CFO.
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 thereunto duly authorized.
NIKE, Inc.
An Oregon Corporation
BY: /s/ Robert E. Harold
________________________
Robert E. Harold
Chief Financial Officer
DATED: April 14, 1998
NIKE, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
Nine Months Ended
February 28,
_________________________
1998 1997
______ ______
(in thousands)
Net income $ 467,297 $ 640,068
Income taxes 296,200 404,900
_________ _________
Income before income taxes 763,497 1,044,968
_________ _________
Add fixed charges
Interest expense (A) 48,865 40,857
Interest component of leases (B) 31,883 19,329
_________ _________
Total fixed charges 80,748 60,186
_________ _________
Earnings before income taxes and
fixed charges (C) $ 842,602 $1,102,984
========= =========
Ratio of earnings to total fixed
charges 10.43 18.33
========= =========
(A) Interest expense includes both expensed and capitalized.
(B) Interest component of leases includes one-third of rental expense,
which approximates the interest component of operating leases.
(C) Earnings before income taxes and fixed charges is exclusive of
capitalized interest.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE FEBRUARY 28, 1998 FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-END> FEB-28-1998
<CASH> 150,280
<SECURITIES> 0
<RECEIVABLES> 1,809,830
<ALLOWANCES> 63,282
<INVENTORY> 1,566,099
<CURRENT-ASSETS> 3,893,032
<PP&E> 1,710,068
<DEPRECIATION> 618,549
<TOTAL-ASSETS> 5,638,103
<CURRENT-LIABILITIES> 1,836,748
<BONDS> 385,311
<COMMON> 2,855
0
300
<OTHER-SE> 3,371,722
<TOTAL-LIABILITY-AND-EQUITY> 5,638,103
<SALES> 7,245,366
<TOTAL-REVENUES> 7,245,366
<CGS> 4,503,836
<TOTAL-COSTS> 4,503,836
<OTHER-EXPENSES> 1,905,857
<LOSS-PROVISION> 24,954
<INTEREST-EXPENSE> 47,222
<INCOME-PRETAX> 763,497
<INCOME-TAX> 296,200
<INCOME-CONTINUING> 467,297
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 467,297
<EPS-BASIC> 1.61
<EPS-DILUTED> 1.58
</TABLE>
