Markets

Nike Well Positioned With Cash, Rise in Global Orders

By David Phillips

Updated on: October 8, 2008 / 1:10 PM EDT / MoneyWatch

Long recognized as a well-run, innovative athletic footwear and apparel company, Nike has demonstrated its "swish" for making money in other investments, too. As reported in the first-quarter 2009 10-Q regulatory filing:

"On December 17, 2007, the Company completed the sale of the Starter brand business to Iconix Brand Group, Inc. for $60.0 million in cash. This transaction resulted in a gain of $28.6 million during the year ended May 31, 2008."
"On April 17, 2008, the Company completed the sale of NIKE Bauer Hockey Corp. for $189.2 million in cash to a group of private investors ("the Buyer"). The sale resulted in a net gain of $32.0 million recorded during the year ended May 31, 2008. This gain included the recognition of a $46.3 million cumulative foreign currency translation adjustment previously included in accumulated other comprehensive income."

A review of the company's available-for-sale securities shows no material exposure to toxic assets, such as collateralized mortgage obligations (CMOs) or other Level 3 investments (those that trade so infrequently that there is virtually no reliable market price for them), as of August 31.

What's more, in a sluggish economic environment where liquidity is king, Nike exited its first-quarter 2009 with approximately $1.7 billion in cash on its books. In addition, global orders rose 10 percent in first-quarter 2009.