RML Russell CP Delaware

Russell Exceeds Consensus EPS Estimates on Record First Quarter Sales Reaffirms Sales and Earnings Guidance for 2005 ATLANTA, April 28 /PRNewswire-FirstCall/ -- Russell Corporation (NYSE:RML) today reported fiscal 2005 first quarter net sales of $313.2 million, a 24% increase over the comparable period last year, that also sets a new sales record for the first quarter. The Company reported first quarter earnings of $2.2 million, or $.07 per diluted share, versus earnings of $0.5 million, or $.02 per diluted share, in first quarter 2004. (Logo: http://www.newscom.com/cgi-bin/prnh/20030630/RMLCORPLOGO ) Sales for the quarter ended April 3, 2005, reflect a 3% increase in the Company's ongoing businesses, in addition to $54 million of incremental sales for acquisitions owned for less than a year. Excluding the impact of the revenue associated with the Major League Baseball contract, which expired in 2004, company-wide organic sales were up 5% over a year ago. In addition to a strong showing by Brooks, with sales up more than 30% over their 2004 first quarter, sales increases were led by JERZEES, with particular strength in the artwear channel. "We are pleased that Brooks has made such a significant contribution and exceeded our expectations for the quarter," said Jack Ward, chairman and CEO. "We also were extremely pleased to have sales growth from our core businesses in addition to our acquisitions," said Ward. "Organic gains in the quarter were led by JERZEES with activewear sales increases in the artwear channel in the mid teens. JERZEES also experienced nearly double digit growth in mass retail." Gross profit was $85.9 million, or a 27.4% gross margin, for the 2005 first quarter versus a gross profit of $64.6 million, or a 25.7% gross margin, in the prior year. Lower manufacturing costs and contributions from acquisitions positively impacted gross profit during the quarter. Selling, general and administrative expenses ("SG&A") for the 2005 first quarter were $73.5 million, or 23.5% of net sales, versus last year's $56.5 million, or 22.4% of net sales in the comparable period last year. SG&A increased primarily due to the higher relative SG&A expenses associated with recent acquisitions. The first quarter of 2005 includes approximately $.02 cents per share in extra expenses associated with the compliance and testing of Sarbanes-Oxley 404. Outlook "With our solid start to the year, we are reaffirming our 2005 fiscal year guidance for sales and earnings. We continue to expect sales to be in the range of $1.50 billion to $1.52 billion versus $1.298 billion last year," said Ward. "Additionally, we are reaffirming our quarterly ongoing earnings guidance issued earlier this year." "We continue to see positive results from our expansion in all three categories of the sporting goods business: sports apparel, sporting goods equipment and performance footwear," added Ward. "As we continue to develop new opportunities and expand programs within our core brands, we believe our strategy to maximize our presence in the sporting goods industry will drive continued sales and earnings increases beyond 2005. Our current sales outlook remains positive due to these efforts, and we are confident that expected synergies from our acquisitions will lead to improved levels of profitability longer term," Ward added. Conference Call Information Management will have a conference call today, April 28, 2005, at 8:30 a.m. Eastern Time to discuss the first quarter results. The call may be accessed at (877) 264-7865 (domestically), and (706) 634-4917 (internationally), using conference call ID number 5418817. 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 athletic apparel, uniforms, footwear and equipment for a wide variety of sports, outdoor and fitness activities. The Company's major brands include Russell Athletic(R), JERZEES(R), Spalding(R), Brooks(R), Huffy Sports(R), Bike(R), Moving Comfort(R), and Mossy Oak(R). The Company's common stock is listed on the New York Stock Exchange under the symbol RML and its web site address is http://www.russellcorp.com/ . Forward Looking Statement This Press Release includes "forward-looking" statements (as defined by the Private Securities Litigation Reform Act of 1995 (the "Act")) that describe our beliefs concerning future business conditions, prospects, growth opportunities, and the outlook for the Company based upon currently available information. Wherever possible, we have identified these statements by words such as "anticipate," "believe," "intend," "expect," "continue," "could," "may," "plan," "project," "predict," "will" and similar expressions. We include such statements because we believe it is important to communicate our future expectations to our shareholders, and we therefore make such statements in reliance upon the safe harbor provisions of the Act. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including, but not limited to, any projections of sales and quarterly earnings. These forward-looking statements are based upon assumptions that we believe are reasonable. Factors that could cause our actual results to differ materially from those expressed or implied in such forward-looking statements include, but are not limited to: (a) our mix of products sold; (b) our strategy for developing new business opportunities and expanded business programs; (c) risks related to the Brooks, Huffy Sports and American Athletic acquisitions, our ability to realize synergies associated with those acquisitions, and our overall acquisition strategy; and (d) other risk factors listed in our reports filed with the Securities and Exchange Commission from time to time. We undertake no obligation to revise the forward-looking statements included in this Press Release to reflect any future events or circumstances. Our actual results, performance or achievements could differ materially from the results expressed or implied by any forward-looking statements contained in this Press Release. RUSSELL CORPORATION Consolidated Statements of Income (Amounts in Thousands Except Share and Per Share Amounts) 13 Weeks 13 Weeks Ended Ended 4/03/05 4/04/04 Net sales $313,242 $251,793 Cost of goods sold 227,351 187,160 Gross profit 85,891 64,633 Selling, general and administrative expenses 73,517 56,478 Other (income) expense - net (546) 138 Operating income 12,920 8,017 Interest expense, net 8,889 7,187 Non-controlling interests 674 -- Income before income taxes 3,357 830 Provision for income taxes 1,175 299 Net income $2,182 $531 Weighted-average common shares outstanding: Basic 32,856,924 32,546,574 Diluted 33,195,681 32,834,510 Net income per common share: Basic $0.07 $0.02 Diluted $0.07 $0.02 RUSSELL CORPORATION Consolidated Balance Sheets (Amounts in Thousands Except Share and Per Share Amounts) 4/03/05 1/01/05 4/04/04 ASSETS Current assets: Cash $29,209 $29,816 $35,225 Accounts receivable, net 241,179 212,063 178,415 Inventories 445,825 411,701 380,972 Prepaid expenses and other current assets 19,608 17,737 16,732 Income tax receivable 14,252 6,101 15,337 Total current assets 750,073 677,418 626,681 Property, plant & equipment, net 322,461 322,890 323,172 Other assets 252,260 253,801 129,880 Total assets $1,324,794 $1,254,109 $1,079,733 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $92,353 $94,642 $71,204 Accrued expenses 83,904 95,780 73,544 Deferred income taxes 14,223 4,054 5,562 Short-term debt 20,359 18,190 8,942 Current maturities of long-term debt 6,990 6,938 6,850 Total current liabilities 217,829 219,604 166,102 Long-term debt, less current maturities 438,901 372,921 319,294 Deferred liabilities: Income taxes 19,359 20,286 6,609 Pension and other 66,500 64,351 58,943 Non-controlling interests 14,742 14,096 12,075 Commitments and contingencies -- -- -- Stockholders' equity: Common stock, par value $.01 per share; authorized 150,000,000 shares, issued 41,419,958 shares 414 414 414 Paid-in capital 40,206 40,716 38,552 Retained earnings 756,671 755,799 712,310 Treasury stock, at cost (198,169) (201,171) (206,802) Accumulated other comprehensive loss (31,659) (32,907) (27,764) Total stockholders' equity 567,463 562,851 516,710 Total liabilities & stockholders' equity $1,324,794 $1,254,109 $1,079,733 RUSSELL CORPORATION Consolidated Statements of Cash Flows (Amounts in Thousands) April 3, April 4, 2005 2004 Operating Activities: Net income $2,182 $531 Adjustments to reconcile net income to net cash used in operating activities: Depreciation 12,501 11,442 Amortization 934 298 Earnings of non-controlling interests (674) - Provision for deferred income taxes 8,178 - Other 2,903 71 Changes in operating assets & liabilities: Trade accounts receivable (33,862) (1,275) Inventories (35,048) (31,078) Prepaid expenses and other current assets (1,918) (139) Other assets 167 3,855 Accounts payable and accrued expenses (11,175) (9,279) Income taxes (8,079) (798) Pension and other deferred liabilities 2,149 (922) Net cash used in operating activities (61,742) (27,294) Investing Activities: Purchases of property, plant & equipment (12,002) (3,241) Proceeds from the sale of property, plant & equipment and other assets 114 502 Net cash refund from (paid for) acquisitions, joint ventures and other 3,903 (1,965) Other 300 1,319 Net cash used in investing activities (7,685) (3,385) Financing Activities: Borrowings on credit facility and other - net 64,610 37,645 Borrowings on short-term debt 3,863 992 Dividends on common stock (1,311) (1,301) Treasury stock re-issued 1,653 679 Cost of common stock for treasury (8) (17) Net cash provided by financing activities 68,807 37,998 Effect of exchange rate changes on cash 13 (69) Net (decrease) increase in cash (607) 7,250 Increase in cash from consolidating Frontier Yarns, LLC - 7,859 Cash balance at beginning of period 29,816 20,116 Cash balance at end of period $29,209 $35,225 http://www.newscom.com/cgi-bin/prnh/20030630/RMLCORPLOGO http://photoarchive.ap.org/ DATASOURCE: Russell Corporation CONTACT: Financial, K. 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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