RML Russell CP Delaware

Russell Reports Earnings at Top End of Expected Range Increases sales expectations, raises lower end of projected EPS range for full year ATLANTA, July 29 /PRNewswire-FirstCall/ -- Russell Corporation (NYSE:RML) today reported fiscal 2004 second quarter earnings of $10.2 million or $.31 per diluted share, which includes the previously announced 8 1/2 cents per share one-time gain on the sale of a minority interest in Marmot Mountain, Ltd. On an ongoing basis, 2004 second quarter earnings were $7.4 million ($.22 per diluted share), at the top end of the previous projection and up 10% from earnings of $6.7 million ($.20 per diluted share) in the second quarter of 2003. (Logo: http://www.newscom.com/cgi-bin/prnh/20030630/RMLCORPLOGO ) The Company also reported second quarter net sales of $289.8 million, an 8% increase over the comparable period last year. Incremental sales from acquisitions accounted for $12.9 million of the increase versus prior year, with a 3% increase in the Company's ongoing businesses. Solid gains in the Athletic Group were led by double-digit ongoing increases at Spalding and Mossy Oak. Gross profit was $80.3 million, or a 27.7% gross margin, for the 2004 second quarter versus a gross profit of $77.4 million, or a 28.9% gross margin in the prior year. During the 2004 second quarter, gross profit was positively impacted by sales and production increases, favorable cost reductions and improved efficiencies. These benefits were offset by continued pricing pressure in Activewear and higher year-over-year fiber and other costs. Selling, general and administrative expenses ("SG&A") for the 2004 second quarter were $61.5 million, or 21.2% of net sales, versus $58.5 million, or 21.8% of net sales in the comparable period last year. Outlook "We are very pleased with our acquisitions of American Athletic, Inc. ("AAI") and Huffy Sports, which will be a part of our Spalding organization. These acquisitions solidify Russell's position as a leading branded athletic and sporting goods company and will result in Russell being the largest basketball equipment company in the world," said Jack Ward, chairman and CEO. He added, "We believe the combination of AAI, Huffy Sports and Spalding will present significant opportunities for synergies in building sales and reducing costs." Ward continued, "With expectations for second half sales growth from existing businesses in the 6-8% range, and including these latest acquisitions, we are increasing our 2004 fiscal year sales forecast to be in the range of $1.30 billion to $1.33 billion versus $1.186 billion in 2003." "The fall expansion of Russell Athletic Dri-POWER(R) and introduction of Sweatless Sweats(TM), Spalding's continued strong sell-through, and Mossy Oak's new APX(TM) and Elements(TM) introductions, contribute to our sales expectations for the second half of the year," Ward added. "Additionally, in Activewear, we anticipate significant revenue resulting from new and incremental fall business with Target and Dollar General. We also expect further increases in Artwear as we continue to expand distribution and build market share." Based on the strong second quarter results, the Company is raising the lower end of the forecasted range of earnings per diluted share for fiscal 2004. Revised expectations of EPS for the fiscal year 2004 are $1.45 to $1.60. For the remainder of 2004, Russell expects the following ranges: -- Third quarter earnings * Total diluted EPS, between $.70 and $.78 which includes expenses of $.03 to $.05 from the Huffy Sports acquisition and/or special projects and activities -- Fourth quarter earnings * Total diluted EPS, between $.42 and $.49 which includes expenses of $.03 to $.05 from the Huffy Sports acquisition and/or special projects and activities Conference Call Information Management will have a conference call today, July 29, 2004, at 8:30 a.m. Eastern Time to discuss the second quarter results. The call may be accessed at (877) 264-7865 (domestically), and (706) 634-4917 (internationally), using conference call ID number 8883612. 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 with over a century of success in marketing athletic uniforms, apparel and equipment for a wide variety of sports, outdoor and fitness activities. The Company's brands include: Russell Athletic(R), JERZEES(R), Spalding(R), AAI(R), Huffy Sports(R), Mossy Oak(R), Bike(R), Moving Comfort(R), Dudley(R), Cross Creek(R) and Discus(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, including the acquisitions of AAI and Huffy Sports; (b) risks related to Russell's ability to realize synergies from the combination of AAI, Huffy Sports and Spalding; (c) Russell's ability to achieve sales growth through expanded or new business with new or existing customers; (d) changes in customer demand for Russell's products; 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. - Tables to follow - RUSSELL CORPORATION Consolidated Statements of Income (Dollars in Thousands Except Share and Per Share Amounts) 13 Weeks 13 Weeks 26 Weeks 26 Weeks Ended Ended Ended Ended 7/4/04 7/6/03 7/4/04 7/6/03 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Net sales $289,771 $267,925 $541,564 $495,908 Cost of goods sold 209,426 190,539 396,586 355,700 Gross profit 80,345 77,386 144,978 140,208 Selling, general and administrative expenses 61,499 58,499 117,791 107,877 Other (income) expense - net (5,060) 704 (4,736) 1,419 Operating income 23,906 18,183 31,923 30,912 Interest expense 7,754 7,443 14,941 14,610 Non-controlling interest 274 -- 274 -- Income before income taxes 15,878 10,740 16,708 16,302 Provision for income taxes 5,716 4,081 6,015 6,195 Net income $10,162 $6,659 $10,693 $10,107 Weighted-average common shares outstanding: Basic 32,652,492 32,345,952 32,614,822 32,281,964 Diluted 32,836,177 32,826,939 32,843,219 32,635,809 Net income per common share: Basic $0.31 $0.21 $0.33 $0.31 Diluted $0.31 $0.20 $0.33 $0.31 Cash dividends per common share $0.04 $0.04 $0.08 $0.08 RUSSELL CORPORATION Consolidated Balance Sheets (Dollars in Thousands Except Share and Per Share Amounts) 7/4/04 1/3/04 7/6/03 ASSETS (Unaudited) (1) (Unaudited) Current assets: Cash $21,789 $20,116 $7,945 Accounts receivable, net 225,951 175,514 217,522 Inventories 427,564 346,946 403,225 Prepaid expenses and other current assets 20,643 15,938 12,922 Income tax receivable 10,353 14,585 1,315 Total current assets 706,300 573,099 642,929 Property, plant & equipment, net 317,303 303,234 315,731 Other assets 134,161 144,777 137,041 Total assets $1,157,764 $1,021,110 $1,095,701 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $98,124 $78,368 $86,148 Accrued expenses 68,223 76,993 66,932 Deferred income taxes 6,078 5,165 5,772 Short-term debt 9,481 4,088 6,289 Current maturities of long-term debt 6,882 5,000 5,000 Total current liabilities 188,788 169,614 170,141 Long-term debt, less current maturities 362,072 272,355 380,747 Deferred liabilities: Income taxes 6,609 6,609 9,384 Pension and other 60,790 57,668 54,967 Non-controlling interest 12,348 -- -- 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 38,665 38,625 40,979 Retained earnings 721,168 713,310 682,816 Treasury stock, at cost (8,786,463 shares at 7/4/04; 8,897,075 shares at 1/3/04 and 9,011,787 shares at 7/6/03) (204,943) (208,038) (212,298) Accumulated other comprehensive loss (28,147) (29,447) (31,449) Total stockholders' equity 527,157 514,864 480,462 Total liabilities & stockholders' equity $1,157,764 $1,021,110 $1,095,701 (1) - Derived from audited financial statements. RUSSELL CORPORATION Unaudited Financial Highlights (Dollars in Thousands) 13 Weeks 13 Weeks 26 Weeks 26 Weeks Ended Ended Ended Ended 7/4/04 7/6/03 7/4/04 7/6/03 Domestic Segment Brand Groupings: Athletic $117,410 $97,490 $231,056 $185,680 Activewear 139,543 143,595 247,664 260,140 256,953 241,085 478,720 445,820 International Segment 32,818 26,840 62,844 50,088 Consolidated Total $289,771 $267,925 $541,564 $495,908 http://www.newscom.com/cgi-bin/prnh/20030630/RMLCORPLOGO http://photoarchive.ap.org/ DATASOURCE: Russell Corporation CONTACT: Roger Holliday (Financial), +1-678-742-8181, or Nancy Young (Media), +1-678-742-8118, both of Russell Corporation Web site: http://www.russellcorp.com/

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