Russell Numbers Come In At High End Of Guidance

Russell Numbers Come In At High End Of Guidance

OCTOBER 27, 2005 -- Russell Corp. reported 3Q05 earnings of $15.8 million, or 47¢ per diluted share on sales of $424.6 million vs last year's $422.7 million in revenues. Operating income was $33.9 million in the quarter, down from last year's $44.0 million, as operational issues disclosed in 2Q were exacerbated by Hurricanes Katrina and Rita. In addition to the previously announced impact of the elimination of the COO position in 3Q of approximately 6¢ cents per share, the company experienced significant economic losses attributed to the storms. The Company estimates the equivalent of 5¢ per share of lost earnings associated with missed sales due to the hurricanes plus additional direct costs of 2¢ per share in 3Q.

Excluding the impact of the hurricanes and the elimination of the COO position in the quarter, earnings would have been approximately 60¢ per share, at the top end of the range previously provided by the company. This compares to 3Q04 EPS of 82¢, which included a 13¢ benefit from a favorable tax adjustment.

Russell achieved results at the top end of range versus earlier projections due to lower than expected costs in Activewear and strong sales and profit improvements in international apparel, which were partially offset by losses at Huffy Sports.

Sales in the Sporting Goods segment increased by 5%, or nearly $10 million, with sales from acquisitions owned for less than a year contributing approximately $33 million. Continued strength in Dri-POWER performance products for the Russell Athletic Group partially offset declines due to product availability. Sales in the Spalding Group were down slightly from prior year, while Brooks continued to perform exceptionally well, contributing nearly $32 million in revenues in the quarter and achieving its profit plan.

In the Activewear segment, demand remained strong for JERZEES products in the Artwear channel, offsetting declines in the Retail channel, which were primarily due to retail inventory adjustments.

Headline
January 30, 2005
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