FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
Commission file number 1-9340
REEBOK INTERNATIONAL LTD.
_________________________________________________________________
(Exact name of registrant as specified in its charter)
Massachusetts 04-2678061
____________________________________ ____________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 Technology Center Drive, Stoughton, Massachusetts 02072
_________________________________________________________________
(Address of principal executive offices) (Zip Code)
(617) 341-5000
_________________________________________________________________
(Registrant's telephone number, including area code)
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 ( )
The number of shares outstanding of registrant's common stock,
par value $.01 per share, at August 8, 1995, was 78,410,156
shares.
<PAGE>
REEBOK INTERNATIONAL LTD.
INDEX
PART I. FINANCIAL INFORMATION:
Item 1 Financial Statements (Unaudited)
Consolidated Balance Sheets - June 30, 1995 and
1994, and December 31, 1994 . . . . . . . . . . 2-3
Consolidated Statements of Income - Three and
Six Months Ended June 30, 1995 and 1994 . . . . 4
Consolidated Statements of Cash Flows - Six
Months Ended June 30, 1995 and 1994 . . . . . . 5-6
Notes to Consolidated Financial Statements . . . 7-8
Item 2
Management's Discussion and Analysis of Results
Of Operations and Financial Condition . . . . .10-13
Part II. OTHER INFORMATION:
Item 1 Legal Proceedings . . . . . . . . . . . . . . . . 14
Items 2-5 Not Applicable . . . . . . . . . . . . . . . . . 15
Item 6 Exhibits and Reports on Form 8-K . . . . . . . . 16
<PAGE>
REEBOK INTERNATIONAL LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
1995 1994 1994
__________ __________ ___________
(Amounts in thousands)
Current assets:
Cash and cash equivalents $ 89,661 $ 68,290 $ 83,936
Accounts receivable, net
of allowance for doubtful
accounts (1995, $51,370;
June 1994, $51,014;
December 1994, $44,862) 627,804 564,157 532,475
Inventory 734,175 564,646 624,625
Deferred income taxes 76,447 64,992 66,456
Prepaid expenses 28,784 30,061 29,952
__________ __________ __________
Total current assets 1,556,871 1,292,146 1,337,444
__________ __________ __________
Property and equipment, net 190,307 139,117 164,848
Non-current assets:
Intangibles, net of
amortization 97,876 95,669 96,196
Deferred income taxes 3,516 - 2,910
Other 43,205 36,072 48,063
__________ __________ __________
144,597 131,741 147,169
__________ __________ __________
$1,891,775 $1,563,004 $1,649,461
========== ========== ==========
-2-
<PAGE>
REEBOK INTERNATIONAL LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Continued)
June 30, December 31,
1995 1994 1994
__________ __________ __________
(Amounts in thousands, except share data)
Current liabilities:
Notes payable to banks $ 71,340 $ 37,141 $ 63,837
Commercial paper 85,000 20,000 -
Current portion of
long-term debt 2,662 3,433 5,190
Accounts payable 166,883 134,677 170,622
Accrued expenses 189,753 165,604 157,479
Income taxes payable 110,087 124,826 102,392
Dividends payable 5,924 6,191 6,068
__________ __________ __________
Total current liabilities 631,649 491,872 505,588
__________ __________ __________
Long-term debt, net of
current portion 237,528 135,898 131,799
Minority interest 27,718 17,784 21,569
Commitments and contingencies
Stockholders' equity:
Common stock, par value $.01;
authorized 250,000,000 shares;
issued 1995, 114,729,016;
issued June 30, 1994,
118,604,381; issued December 31,
1994, 117,155,611 1,147 1,186 1,172
Additional paid-in capital 79,736 223,298 167,953
Retained earnings 1,503,389 1,302,585 1,428,058
Less 36,210,902 shares in
treasury at cost (603,241) (603,241) (603,241)
Unearned compensation (2,188) (3,286) (2,598)
Foreign currency translation
adjustment 16,037 (3,092) (839)
__________ __________ __________
994,880 917,450 990,505
__________ __________ __________
$1,891,775 $1,563,004 $1,649,461
========== ========== ==========
The accompanying notes are an integral part of the condensed
consolidated financial statements.
-3-
<PAGE>
REEBOK INTERNATIONAL LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
____________________ _________________
1995 1994 1995 1994
____ ____ ____ ____
<S> <C> <C> <C> <C>
Net sales $ 788,692 $ 776,753 $1,724,170 $1,634,119
Other income (expense) 915 (1,299) 2,053 (1,046)
_________ _________ __________ __________
789,607 775,454 1,726,223 1,633,073
Costs and expenses:
Cost of sales 471,845 468,979 1,029,244 988,823
Selling, general and
administrative expenses 258,049 218,900 523,312 442,619
Special charges 18,034 - 18,034 -
Amortization of intangibles 1,054 1,078 2,056 2,214
Minority interest 1,443 999 4,820 3,681
Interest expense 5,726 4,005 12,287 9,242
Interest income (900) (777) (3,692) (1,888)
_________ _________ __________ __________
755,251 693,184 1,586,061 1,444,691
_________ _________ __________ __________
Income before income taxes 34,356 82,270 140,162 188,382
Income taxes 12,952 31,262 52,841 71,585
_________ _________ __________ __________
Net income $ 21,404 $ 51,008 $ 87,321 $ 116,797
========= ========= ========== ==========
Net income per common share $ 0.26 $ 0.60 $ 1.07 $ 1.38
========= ========= ========== ==========
Dividends per common share $ 0.075 $ 0.075 $ 0.15 $ 0.15
========= ========= ========== ==========
Weighted average common and
common equivalent shares
outstanding
81,082 84,407 81,625 84,863
========= ========= ========== ==========
</TABLE>
The accompanying notes are an integral part of the condensed
consolidated financial statements.
-4-
<PAGE>
REEBOK INTERNATIONAL LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
June 30,
________________
1995 1994
____ ____
(Amounts in thousands)
Cash flows from operating activities:
Net income $ 87,321 $ 116,797
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and amortization 17,167 15,862
Amortization of intangibles 2,056 2,214
Minority interest, net of dividends paid 4,820 2,872
Amortization of unearned compensation 1,043 296
Deferred income taxes (10,626) (8,596)
Changes in operating assets and
liabilities:
Accounts receivable (77,394) (94,474)
Inventory (88,691) (38,401)
Prepaid expenses 1,595 (7,927)
Other (11,888) (1,641)
Accounts payable (10,875) (11,274)
Accrued expenses 30,406 21,666
Income taxes payable 7,290 41,609
__________ __________
Total adjustments (135,097) (77,794)
__________ __________
Net cash (used for) provided by
operating activities (47,776) 39,003
__________ __________
Cash flows from investing activity:
Payments to acquire property and
equipment (36,522) (20,095)
__________ __________
Net cash (used for)
investing activity (36,522) (20,095)
__________ __________
-5-
<PAGE>
REEBOK INTERNATIONAL LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
June 30,
_________________
1995 1994
____ ____
(amounts in thousands)
Cash flows from financing activities:
Net borrowings of notes payable to banks $ 13 $ 11,728
Proceeds from issuance of commercial paper 85,000 20,000
Net borrowings of long-term debt 101,125 190
Proceeds from issuance of common stock to
employees 6,853 5,962
Dividends paid (12,134) (12,496)
Repurchases of common stock (95,728) (49,873)
________ _________
Net cash provided by (used for)
financing activities 85,129 (24,489)
________ _________
Effect of exchange rate changes on cash
and cash equivalents 4,894 (5,476)
________ _________
Net increase (decrease)in cash and cash 5,725 (11,057)
equivalents ________ _________
Cash and cash equivalents at beginning of period 83,936 79,347
________ _________
Cash and cash equivalents at end of period $ 89,661 $ 68,290
======== =========
Supplemental disclosures of cash flow information:
1995 1994
____ ____
Cash paid during the period for:
Interest $ 11,798 $ 9,213
Income taxes 45,146 27,999
The accompanying notes are an integral part of the condensed consolidated
financial statements.
-6-
<PAGE>
REEBOK INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
______________________________
The accompanying unaudited condensed consolidated
financial statements have been prepared in accordance with
generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q
and Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by
generally accepted accounting principles for complete
financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been
included. Operating results for the six months ended June
30, 1995 are not necessarily indicative of the results that
may be expected for the year ended December 31, 1995. For
further information, refer to the consolidated financial
statements and footnotes thereto included in the Company's
annual report on Form 10-K for the year ended December 31,
1994.
NOTE 2 - CONTINGENCY
______________________________
On June 6, 1995, the Company settled a lawsuit which
was filed on February 5, 1993 by Byron A. Donzis ("Donzis")
against the Company and its then wholly owned subsidiary
Ellesse U.S.A., Inc., entitled Bryon A. Donzis v. Reebok
International Ltd. et al., Civil Action No. 93-10260H in the
United States District Court for the District of
Massachusetts and the related lawsuit, entitled Donzis
Laboratories, Inc., et al. v. Reebok International Ltd. et
al., Civil Action No. 93-11761H, which was filed on August
10, 1993 in the United States District Court for the
District of Massachusetts. In connection with the
settlement, the Company has acquired an option to acquire
certain patent rights owned by Donzis relating to inflatable
technology. The amount paid by the Company in connection
with such settlement was not material.
Subject to final approval of the settlement with the
National Association of Attorneys General ("NAAG") relating
to the investigation by NAAG against the Company (the "NAAG
Settlement"), a class action entitled Marshall Varano v.
Reebok International Ltd. (Case No. 67348) which was filed
-7-
<PAGE>
NOTE 2 - CONTINGENCY (Cont'd)
against the Company on February 7, 1994 in California
Superior Court challenging the Company's resale pricing
practices in California under California State law and
seeking unspecified damages, including treble damages,
injunctive relief and costs, was settled by the Company on
May 30, 1995 for a non-material amount.
Reference is made to Item 3. Legal Proceedings in the
Company's Annual Report on Form 10-K, dated March 30, 1995
for a description of Stutz Motor Car of America, Inc. v.
Reebok International Ltd.
NOTE 3 - SPECIAL CHARGES
________________________
The Company recorded special charges of $18,034,000 in the
second quarter principally related to severance and other costs
associated with the streamlining of certain segments of its
operations. The special charges consist of approximately
$10,000,000 of severance and related expenses and $8,000,000
related to facilities consolidations. The after-tax effect of
these charges was $11,235,000 or $.14 per share.
-8-
<PAGE>
REEBOK INTERNATIONAL LTD. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The following table shows the percentage which amounts in the Consolidated
Statements of Income bear to net sales:
Percentage of Net Sales
_______________________
Three Months Ended Six Months Ended
June 30, June 30,
__________________ __________________
1995 1994 1995 1994
____ ____ ____ ____
Net sales 100.0% 100.0% 100.0% 100.0%
Other income (expense) .1 (.2) .1 (.1)
______ ______ _____ _____
100.1 99.8 100.1 99.9
Costs and expenses:
Cost of sales 59.8 60.4 59.7 60.5
Selling, general and
administrative expenses 32.7 28.2 30.4 27.1
Special charges 2.3 - 1.0 -
Amortization of intangibles .1 .1 .1 .1
Minority interest .2 .1 .3 .2
Interest expense .7 .5 .7 .6
Interest income (.1) (.1) (.2) (.1)
______ ______ _____ _____
95.7 89.2 92.0 88.4
______ ______ _____ _____
Income before income taxes 4.4 10.6 8.1 11.5
Income taxes 1.6 4.0 3.1 4.4
______ ______ _____ _____
Net income 2.8% 6.6% 5.0% 7.1%
====== ====== ===== =====
-9-
<PAGE>
REEBOK INTERNATIONAL LTD. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Operating Results
Second Quarter 1995 Compared to Second Quarter 1994
Net sales for the quarter ended June, 1995 increased by
$11.9 million, 1.5% over the level reported for the second
quarter of 1994. The Reebok Division's worldwide sales were
$675.4 million, an increase of 2.4% from $659.4 million(A) in
1994. The Reebok Division's U.S. footwear sales decreased
6.2% to $339.3 million from $361.8 million in 1994. The
decrease in the Reebok Division's U.S. footwear sales is
attributed primarily to decreases in the running, classic,
and outdoor categories which resulted in a decrease in sales
to certain athletic specialty accounts and volume retailers.
This decrease in sales was partially offset by increases in
Reebok's basketball and women's fitness categories, as well
as increases in Reebok's retail store sales. The Reebok
Division's U.S. apparel sales increased by 9.9% to $35.5
million from $32.3 million(A) in 1994. The Reebok Division's
International sales (including both footwear and apparel)
were $300.6 million in 1995, an increase of 13.3% from
$265.3 million in 1994. Approximately one half of the
International sales gain can be attributed to the impact of
a weaker dollar. On a local currency basis, eliminating the
impact of foreign currency exchange changes, France, Holland
and Spain had increases in sales, whereas Germany, Japan,
Austria and Italy experienced decreased sales.
Rockport sales increased by 4.4% to $78.7 million from
$75.4 million in 1994. Rockport experienced weak at-once
business primarily in outdoor footwear during the second
quarter. During the quarter, however, Rockport continued
strong growth in its women's business, which offset the
decline in outdoor. Avia sales decreased by 17.7% to $34.6
million from $42.0 million(A) in 1994. The decrease in
Avia's sales reflected decreases in both domestic and
international sales.
___________
(A) The 1994 sales were adjusted on a pro-forma basis to
reflect Tinley apparel sales in Avia sales. The Tinley
division was transferred to the Avia group from Reebok
effective June 1, 1994. In order to present amounts on a
comparable basis, Tinley's apparel sales prior to June 1,
1994 have been reclassified to Avia.
-10-
<PAGE>
The improvement in gross margin from 39.6% in 1994
to 40.2% in 1995 was favorably impacted by the growth of the
Company's retail outlet business where overall margins tend
to be higher. International margins were also favorably
impacted by the effect of exchange rates.
Selling, general and administrative expenses increased
as a percentage of sales from 28.2% in 1994 to 32.7% in 1995.
The increased spending levels were primarily in marketing and
advertising. The Company has announced its plans to reduce
the annual spending rate of SG&A expenses by $75 million in
1996. In an effort to make such a reduction, the Company
recorded special charges of $18,034,000 in the second quarter
principally related to severance and other costs associated
with the streamlining of certain segments of its operations.
Minority interest represents the minority shareholders'
proportionate share of the net income of certain of the
Company's subsidiaries.
The effective tax rate decreased from 38.0% in 1994 to
37.7% in 1995 due to a change in the geographic mix of
worldwide income.
Year-to-year earnings per share comparisons benefited
from the share repurchase program. Weighted average common
shares outstanding for the quarter ended June 30, 1995
declined to 81.1 million shares, compared to 84.4 million
shares for the second quarter of 1994.
First Six Months 1995 Compared to First Six Months 1994
Net sales for the six months ended June 30, 1995,
increased $90.1 million, 5.5% over the level reported for the
first six months of 1994. The Reebok Division's worldwide
sales were $1.494 billion, an increase of 6.6% from $1.401
billion(A) in 1994. The Reebok Division's U.S. footwear sales
decreased 0.2% to $728.2 million from $729.8 million in 1994.
The decrease is due primarily to decreases in the classic,
outdoor and running categories, which were offset in part by
increases in the children's, baseball and basketball
categories. The Reebok Division's U.S. apparel sales increased
by 24.1% to $79.9 million from $64.4 million(A) in 1994. The
increase reflected strong sales in core basics offset by a
general decline in the licensed apparel business. The Reebok
Division's International sales (including footwear and apparel)
were $686.0 million in 1995, an increase of 13.0% from $606.8
million in 1994. The International sales increase benefited
-11-
<PAGE>
from the weaker U.S. dollar used in translation. Approximately
one half of the International sales gain can be attributed to
the impact of the weaker dollar. On a local currency basis,
eliminating the impact of foreign currency exchange changes,
France and Spain had increases in sales whereas Germany, Japan
and Austria experienced decreased sales.
Rockport sales increased by 11.4% to $163.3 million from
$146.6 million in 1994. All collections, except outdoor,
increased in comparison with the prior year. Avia sales
decreased by 22.8% to $66.8 million from $86.5 million(A) in
1994. The decrease in Avia's sales is attributed primarily to
decreases in the aerobics, cross-training and walking
categories.
Gross margin increased from 39.5% in 1994 to 40.3% in
1995. International margins were favorably impacted by the
effect of exchange rates. U.S. margins were favorably impacted
by the growth of the Company's retail outlet business where the
overall margins tend to be higher.
Selling, general and administrative expenses increased
from 27.1% in 1994 to 30.4% in 1995, primarily as a result of
increased advertising and distribution costs. The Company has
announced its plans to reduce the annual spending rate of SG&A
expenses by $75 million in 1996. In an effort to make such a
reduction, the Company recorded special charges of $18,034,000
in the second quarter principally related to severance and
other costs associated with the streamlining of certain
segments of its operations.
Minority interest represents the minority shareholders'
proportionate share of the net income of certain of the
Company's subsidiaries.
Interest expense increased 32.9% as a result of increased
borrowings to finance working capital needs and the Commpany's
stock repurchase program.
The effective tax rate decreased from 38.0% in 1994 to
37.7% in 1995 due to a change in the geographic mix of
worldwide income.
Year-to-year earnings per share comparisons benefited from
the share repurchase program. Weighted average common shares
outstanding for the six months ended June 30, 1995 declined to
81.6 million shares, compared to 84.9 million shares for the
first six months of 1994.
-12-
<PAGE>
Liquidity and Sources of Capital
The Company's financial position remains strong. Working
capital increased by $124.9 million, or 15.6% from the same
period a year ago. The current ratio at June 30, 1995 was
2.5 to 1, as compared to 2.6 to 1 at December 31, 1994 and
2.6 to 1 at June 30, 1994.
Accounts receivable increased from June 30, 1994 by $63.6
million, or 11.3%, well above the sales increase for the
second quarter. A portion of the increase is due to the
timing of sales in the quarter and the mix of sales between
different International subsidiaries which can impact these
comparisons at a point in time. Approximately $17.1 million
of the year-to-year increase was due to changes in foreign
currency exchange rates. Inventory increased by $169.5
million from June 30, 1994, reflecting increases in most
divisions. Approximately $22.1 million of the year-to-year
increase was due to changes in foreign currency exchange
rates. Approximately $16.9 million of the increase
reflected inventories held by subsidiaries that the Company
acquired since the end of the second quarter of 1994. Also,
the increase in inventory can be partly attributed to the
growth in the Company's retail business. As more business
is done through company-owned factory-direct outlets,
inventory will increase relative to sales growth. The
Company believes that current inventory levels are too high
relative to sales and plans to reduce inventory levels by
the end of 1995.
During the twelve months ended June 30, 1995, cash and
cash equivalents increased by $21.4 million, and outstanding
borrowings increased by $200 million, while $158.0 million of
common stock was repurchased. Cash used for operations during
1995's first six months was $47.8 million. Cash generated from
operations, together with the Company's presently available
financing sources, is expected to adequately finance the
Company's current and planned cash requirements, including the
remaining $127.9 million in share repurchases authorized by
the Board of Directors. As of June 30, 1995, the Company had
repurchased 14,623,300 shares at an average price of $32.28
since the share repurchase program began in July 1992.
-13-
<PAGE>
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
On June 6, 1995, the Company settled a lawsuit which was filed
on February 5, 1993 by Byron A. Donzis ("Donzis") against the
Company and its then wholly owned subsidiary Ellesse U.S.A.,
Inc., entitled Bryon A. Donzis v. Reebok International Ltd. et
al., Civil Action No. 93-10260H in the United States District
Court for the District of Massachusetts and the related
lawsuit, entitled Donzis Laboratories, Inc., et al. v. Reebok
International Ltd. et al., Civil Action No. 93-11761H, which
was filed on August 10, 1993 in the United States District
Court for the District of Massachusetts. In connection with
the settlement, the Company has acquired an option to acquire
certain patent rights owned by Donzis relating to inflatable
technology. The amount paid by the Company in connection with
such settlement was not material.
Subject to final approval of the settlement with the
National Association of Attorneys General ("NAAG") relating to
the investigation by NAAG against the Company (the "NAAG
Settlement"), a class action entitled Marshall Varano v. Reebok
International Ltd. (Case No. 67348) which was filed against the
Company on February 7, 1994 in California Superior Court
challenging the Company's resale pricing practices in
California under California State law and seeking unspecified
damages, including treble damages, injunctive relief and costs,
was settled by the Company on May 30, 1995 for a non-material
amount.
Reference is made to Item 3. Legal Proceedings in the
Company's Annual Report on Form 10-K, dated March 30, 1995 for
a description of Stutz Motor Car of America, Inc. v. Reebok
International Ltd.
-14-
<PAGE>
Items 2 - 5
Not applicable
Item 6
(a) Exhibits:
11. Statement Re Computation of Per Share Earnings
12. Computation of ratio of earnings to fixed charges
27. Financial Data Schedule
(b) Reports on Form 8-K: A report on Form 8-K was filed by
the Company on May 17, 1995 which provided the computation of
the Company's ratio of earnings to fixed charges for the
quarters ended March 31, 1995 and 1994.
-15-
<PAGE>
SIGNATURE
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.
Dated: August 10, 1995
REEBOK INTERNATIONAL LTD.
BY: /s/ KENNETH WATCHMAKER
_________________________
Kenneth Watchmaker
Executive Vice President and
Chief Financial Officer
-16-
<PAGE>
<TABLE>
<CAPTION>
REEBOK INTERNATIONAL LTD.
(Amounts in Thousands, Except Per Share Data)
Exhibit 11 - Statement RE: Computation of Per Share Earnings
Three Months Ended Six Months Ended
June 30, June 30,
__________________ ________________
1995 1994 1995 1994
____ ____ ____ ____
<S> <C> <C> <C> <C>
Primary
________________________________
Average shares outstanding 79,464 82,626 80,061 82,957
Net effect of dilutive stock options 1,618 1,781 1,564 1,906
_______ _______ _______ _______
Total 81,082 84,407 81,625 84,863
======= ======= ======= =======
Net income $21,404 $51,008 $87,321 $116,797
======= ======= ======= =======
Per share amount $ 0.26 $ 0.60 $ 1.07 $ 1.38
======= ======= ======= =======
Fully Diluted
________________________________
Average shares outstanding 79,464 82,626 80,061 82,957
Net effect of dilutive stock options 1,618 1,781 1,564 1,968
_______ _______ _______ _______
Total 81,082 84,407 81,625 84,925
======= ======= ======= =======
Net income $21,404 $51,008 $87,321 $116,797
======= ======= ======= =======
Per share amount $ 0.26 $ 0.60 $ 1.07 $ 1.38
======= ======= ======= =======
</TABLE>
<PAGE>
<PAGE>
Exhibit 12
REEBOK INTERNATIONAL LTD.
(Amounts in Thousands)
Exhibit 12 - Statement RE: Computation of Ratio of Earnings to
Fixed Charges
Six Months Ended
June 30, 1995 June 30, 1994
Earnings
Pretax Income $ 140,162 $ 188,382
Add:
Interest on indebtedness 12,287 9,242
Amortization of debt discount
issuance costs 246 477
Portion of rent representative
of the interest factor 4,826 4,812
_______ _______
Income as adjusted $ 157,521 $ 202,913
======== ========
Fixed Charges
Interest on indebtedness $12,287 $ 9,242
Amortization of debt discount
and issuance costs 246 477
Portion of rent representative
of the interest factor 4,826 4,812
_______ _______
Fixed charges $17,359 $14,531
======== ========
Ratio of earnings to
fixed charges 9.07 13.96
PAGE
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
JUNE 30, 1995 CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENT OF
INCOME AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<CIK> 0000770949
<NAME> REEBOK INTERNATIONAL LTD.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 89,661
<SECURITIES> 0
<RECEIVABLES> 679,174
<ALLOWANCES> 51,370
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0
0
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</TABLE>
