RML Russell CP Delaware

Russell Corporation Reports Fourth Quarter and Year End Results Sales increase 10.5% for the quarter, 9.4% for the year ATLANTA, Feb. 23 /PRNewswire-FirstCall/ -- Russell Corporation (NYSE:RML) today reported fiscal 2004 fourth quarter sales of $334.0 million, an increase of 10.5% over the same period a year ago. The Company also reported earnings of $10.3 million, or $0.31 per diluted share. Earnings for the quarter include an approximate $0.06 per share impact from the dilution of Huffy Sports, severance costs associated with cost improvement initiatives and incremental expenses associated with Sarbanes-Oxley related projects. For the fourth quarter of 2003, earnings were $14.5 million, or $0.44 per diluted share. (Logo: http://www.newscom.com/cgi-bin/prnh/20030630/RMLCORPLOGO ) Sales for the quarter ended January 1, 2005, reflect a 3% increase in the Company's ongoing businesses in addition to approximately $22 million dollars in incremental sales from acquisitions owned for less than a year. Sales gains were again recorded for the Activewear Group, the Athletic Group and the International apparel segment. "During the fourth quarter, sales increases in our domestic segment were led by our Athletic Group. Increases in Athletic were driven by our recent acquisitions, which have solidified and grown our position as a leading branded athletic and sporting goods company. Our International apparel segment continued its sales growth pace, with increases of more than 20% for the quarter and the year," said Jack Ward, chairman and chief executive officer. "For the quarter, our Activewear Group had a 3% increase in revenues, led by our JERZEES(R) sports apparel in the mass channel." Gross profit for the fourth quarter of 2004 was $97.1 million, or a 29.1% gross margin, versus a gross profit of $91.3 million, or a 30.2% gross margin, in the prior year. The positive impact of increased volumes and revenues, coupled with ongoing cost improvements, was dampened by higher year-over-year costs of fiber, transportation and energy, lower margins experienced in Huffy Sports and other increased costs, as well as the fourth quarter impact of price reductions in Artwear which were taken in early 2004. For the 2004 fourth quarter, selling, general and administrative expenses ("SG&A") were $73.5 million versus $65.0 million in the comparable period last year, resulting in operating income of $24.9 million, versus $25.1 million in the same quarter last year. Year-to-date Results For the full year ended January 1, 2005, net sales increased $112 million to $1.298 billion, a 9.4% increase over the prior year's sales of $1.186 billion. Net income for fiscal 2004 was $47.9 million, or $1.46 per share on a fully diluted basis, within the range of previous guidance. Gross profit was $363.9 million, or a 28.0% gross margin, for fiscal 2004 versus a gross profit of $344.1 million, or a 29.0% gross margin, in the prior year. SG&A expenses for fiscal 2004 were $269.6 million, or 20.8% of net sales, versus $246.5 million, also 20.8% of net sales, in fiscal 2003. Operating income for the full 2004 year increased $7.2 million over fiscal 2003, to $100.8 million. Net income for 2004 increased 11.4%, or $4.9 million, to $47.9 million, or $1.46 per diluted share, versus $43.0 million, or $1.32 per diluted share, in 2003. Outlook "We are pleased with our substantial progress in expanding our position as a leading, authentic sporting goods company," said Jack Ward, chairman and CEO. "As we capitalize on our acquisitions of sports equipment and athletic footwear, Russell will continue to gain momentum in the sporting goods market. Acquisitions have resulted in our becoming the leading provider of basketballs and basketball equipment, and we expect Brooks to maintain strong growth in the performance running category. Each of these strengthens Russell's position and is an investment in our future growth." Russell expects sales for fiscal 2005 to increase approximately 15% to 17%, to approximately $1.50 billion to $1.52 billion. As previously stated, Russell expects earnings per fully diluted share in the $1.55 to $1.65 range for 2005. For the first quarter of 2005, the Company expects sales to increase in the 20% plus range and now expects earnings per share of $0.05 to $0.08. For the remaining quarters, the Company expects the following EPS ranges: * Second quarter: - Earnings of $0.18 to $0.22 per share * Third quarter: - Earnings of $0.70 to $0.78 per share * Fourth quarter: - Earnings of $0.52 to $0.60 per share Additionally, the Company expects to record an effective tax rate of approximately 35% for the full year of 2005. Conference Call Information Management will have a conference call today, February 23, 2005, at 8:30 a.m. Eastern Time to discuss the fourth quarter and full year results. The call may be accessed at (877) 264-7865 (domestically), and (706) 634-4917 (internationally), using conference call ID number 3925925. The call will also be simultaneously web cast via the Investor Relations homepage of the Company's website at http://www.russellcorp.com/ . A replay of the call will be available through the website for 30 days. In addition, you can register through the above referenced website if you would like to receive press releases, conference call reminders and other notices. About Russell Corporation Russell Corporation is a leading branded athletic and sporting goods company marketing activewear, athletic uniforms, equipment and athletic footwear for a wide variety of sports, outdoor and fitness activities. The Company's major brands include Russell Athletic(R), JERZEES(R), Spalding(R), and Brooks(R). The Company's common stock is listed on the New York Stock Exchange under the symbol RML and its website address is http://www.russellcorp.com/ . Forward Looking Statement This Press Release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Some of these statements can be identified by terms and phrases such as "anticipate", "believe", "intend", "expect", "continue", "could", "may", "plan", "project", "predict", "will" and similar expressions and include references to assumptions that Russell believes are reasonable and relate to its future prospects, developments and business strategies. Factors that could cause Russell's actual results to differ materially from those expressed or implied in such forward-looking statements include, but are not limited to: (a) risks related to Russell's overall acquisition strategy and its ability to realize anticipated revenue and earnings growth and synergies from its acquisitions, including AAI, Huffy Sports and Brooks; (b) Russell's ability to achieve sales growth through expanded or new business with new or existing customers; (c) changes in customer demand for Russell's products, significant competitive activity and related pricing pressure; (d) raw material price volatility and increases in transportation, energy and other operating costs; and (e) other risk factors listed in Russell's reports filed with the Securities and Exchange Commission from time to time. Russell undertakes no obligation to revise the forward-looking statements included in this Press Release to reflect any future events or circumstances. Russell's actual results, performance or achievements could differ materially from the results expressed in or implied by these forward-looking statements. RUSSELL CORPORATION Consolidated Statements of Income (Dollars in Thousands Except Share and Per Share Amounts) 13 Weeks 13 Weeks 52 Weeks 52 Weeks Ended Ended Ended Ended 1/01/05 1/03/04 1/01/05 1/03/04 Net sales $334,032 $302,354 $1,298,252 $1,186,263 Cost of goods sold 236,933 211,032 934,372 842,127 Gross profit 97,099 91,322 363,880 344,136 Selling, general and administrative expenses 73,509 64,973 269,558 246,477 Other (income) expense - net (1,290) 1,218 (6,469) 4,018 Operating income 24,880 25,131 100,791 93,641 Interest expense, net 7,680 7,227 30,843 29,663 Non-controlling interest 1,081 -- 2,021 -- Income before income taxes 16,119 17,904 67,927 63,978 Provision for income taxes 5,815 3,432 19,991 20,939 Net income $10,304 $14,472 $47,936 $43,039 Weighted-average common shares outstanding: Basic 32,750,260 32,501,189 32,668,376 32,376,617 Diluted 33,000,155 32,785,080 32,897,559 32,726,472 Net income per common share: Basic $0.31 $0.45 $1.47 $1.33 Diluted $0.31 $0.44 $1.46 $1.32 RUSSELL CORPORATION Consolidated Balance Sheets (Dollars in Thousands Except Share and Per Share Amounts) 1/01/05 1/03/04 ASSETS Current assets: Cash $29,816 $20,116 Accounts receivable, net 212,063 175,514 Inventories 411,701 346,946 Prepaid expenses and other current assets 17,737 15,938 Income tax receivable 6,101 14,585 Total current assets 677,418 573,099 Property, plant & equipment, net 322,890 303,234 Other assets 253,801 144,777 Total assets $1,254,109 $1,021,110 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $94,642 $78,368 Accrued expenses 95,780 76,993 Deferred income taxes 4,054 5,165 Short-term debt 18,190 4,088 Current maturities of long-term debt 6,938 5,000 Total current liabilities 219,604 169,614 Long-term debt, less current maturities 372,921 272,355 Deferred liabilities: Income taxes 20,286 6,609 Pension and other 64,351 57,668 Non-controlling interest 14,096 -- Commitments and contingencies -- -- Stockholders' equity: Common stock, par value $.01 per share; authorized 150,000,000 shares, issued 41,419,958 shares 414 414 Paid-in capital 40,716 38,625 Retained earnings 755,799 713,310 Treasury stock, at cost (201,171) (208,038) Accumulated other comprehensive loss (32,907) (29,447) Total stockholders' equity 562,851 514,864 Total liabilities & stockholders' equity $1,254,109 $1,021,110 RUSSELL CORPORATION Consolidated Statements of Cash Flows (Dollars in Thousands) January 1, January 3, January 4, 2005 2004 2003 Operating Activities: Net Income $47,936 $43,039 $34,306 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 46,627 44,177 44,775 Amortization 1,395 759 286 Earnings of non-controlling interests 2,021 - - Debt retirement charge - - 20,097 Other 1,453 6,963 8,684 Changes in operating assets & liabilities: Trade accounts receivable (8,664) (17,600) 12,230 Inventories (26,194) (19,989) 56,407 Prepaid expenses and other current assets 1,164 (8,243) 2,110 Other assets 7,037 (6,478) 2,254 Accounts payable and accrued expenses 6,378 1,406 18,871 Income taxes 8,137 3,305 7,414 Pension and other deferred liabilities (6,001) 10,617 (4,043) Net cash provided by operating activities 81,289 57,956 203,391 Investing Activities: Purchases of property, plant & equipment (35,494) (38,641) (28,343) Proceeds from the sale of property, plant & equipment and other assets 13,697 14,765 9,450 Cash paid for acquisitions, joint ventures and other (158,370) (86,691) (4,670) Other 1,769 678 750 Net cash used in investing activities (178,398) (109,889) (22,813) Financing Activities: Borrowings (payments) on credit facility and other - net 91,307 7,355 (74,800) Borrowings (payments) on short-term debt 9,692 (3,582) 458 Payments of notes payable, including prepayments - - (270,371) Proceeds from issuance of Senior Notes - - 250,000 Debt issuance & amendment costs paid - (468) (18,910) Dividends on common stock (5,216) (5,177) (5,137) Treasury stock re-issued 3,839 5,644 2,574 Cost of common stock for treasury (80) (1,457) (30) Net cash provided by (used in) financing activities 99,542 2,315 (116,216) Effect of exchange rate changes on cash (592) 1,115 (1,625) Net increase (decrease) in cash 1,841 (48,503) 62,737 Increase in cash from consolidating Frontier Yarns, LLC 7,859 - - Cash balance at beginning of period 20,116 68,619 5,882 Cash balance at end of period $29,816 $20,116 $68,619 Supplemental schedule of noncash investing and financing activities: Sold investment - portion of proceeds in the form of stock $4,945 $- $- http://www.newscom.com/cgi-bin/prnh/20030630/RMLCORPLOGO http://photoarchive.ap.org/ DATASOURCE: Russell Corporation CONTACT: Financial, Roger Holliday, +1-678-742-8181, or Media, Nancy Young, +1-678-742-8118, both of Russell Corporation Web site: http://www.russellcorp.com/

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