Russell Reports Second Quarter Sales and Earnings

Russell Reports Second Quarter Sales and Earnings
Acquisition-led sales increases result in record second quarter sales; Outlook
updated for the balance of the year 


ATLANTA, July 28  /PRNewswire-FirstCall/ -- Russell Corporation (NYSE:RML)
today reported fiscal 2005 second quarter earnings of $4.7 million or $.14 per
diluted share on sales of $342.1 million, record sales for any second quarter.

(Logo:  http://www.newscom.com/cgi-bin/prnh/20030630/RMLCORPLOGO)

The 18 percent gain in sales over last year's second quarter was led by
increases associated with acquisitions, which generated more than $50 million
in revenues. Excluding the incremental revenue related to acquisitions, the
Company experienced a slight increase in sales for the quarter.

Operating income was $18.0 million in the quarter, down from last year's $23.9
million which included the one-time gain of $4.4 million associated with the
sale of the Company's position in Marmot Mountain, Ltd.

Sales in the Activewear segment increased more than 10 percent and were
particularly strong in the Artwear channel, which recorded sales increases of
nearly 15 percent for the quarter. Increased product demand led to significant
cost increases associated with ramping up production quickly and reacting to
changes in style mix, negatively impacting second quarter profits. Further
impacting earnings, Activewear did not achieve all of its cost savings goals.

For the Sporting Goods segment, sales increases of nearly 30 percent were
driven by the 2004 acquisitions of AAI, Huffy Sports and Brooks.  Overall,
these acquisitions were on plan, and, as expected, had no material impact on
EPS in the quarter. Excluding these acquisitions, revenue in the Sporting Goods
segment declined 12 percent in the quarter.

Mossy Oak experienced declines in revenue and profits for the quarter versus a
year ago. Lower prices and the reduction of a major retail program resulted in
a revenue decline of more than 30 percent in the quarter. Even though most of
Mossy Oak's sales are planned for the second half, the negative impact to
profits is not expected to be offset for the balance of the year.

Also in the Sporting Goods segment, increases in sales in the quarter for the
Russell Athletic Group's base business only partially offset the absence of
Major League Baseball and the discontinuance of the Discus brand at a major
account.

"Given the expectations we had for the quarter, we are certainly disappointed
with the results," said Jack Ward, chairman and CEO.  "The good news is that
there is solid consumer demand for our products and the major impacts
experienced in the second quarter were primarily operational issues. We are
rapidly addressing these issues, but we expect continued impact into the third
quarter.  We have already taken a number of steps to improve our cost position
and further leverage our growth opportunities."

"Our strategy, to maximize our presence in the sporting goods industry by
developing new business and expanding programs within our core brands,
continues to be successful with our customers," Ward added. "An example is the
integration of Spalding, AAI and Huffy Sports into the Spalding Group, the
world's largest provider of basketball equipment.  We are achieving both
operational and sales synergies with a number of accounts beginning to
introduce new Spalding products into their markets. We believe we can leverage
the strength we have in basketballs with the product offerings from these
integrated businesses to create a strong foundation and increased sales,
particularly with the turn-around at Huffy Sports."

As demand has remained strong, Russell continues to anticipate that the
Activewear segment will achieve strong sales and profit growth for the year,
especially for the Company's market-leading men's fleece business.

"In the Sporting Goods segment, Brooks is having a strong year with continued
sales gains planned for the second half as well," Ward added. "With ongoing
improvements that are being made through the Spalding integration of Huffy
Sports and AAI, we expect to continue building momentum into 2006." Russell
Athletic also anticipates sales increases in the second half, based on the
reception of new styles and expanded floor space at retail.

Ward continued, "With expectations for second half sales growth from existing
businesses in the 4 to 6 percent range, we are maintaining our 2005 fiscal year
sales forecast in the range of $1.500 billion to $1.520 billion versus $1.298
billion in 2004."

Based on the second quarter results, the Company is revising the forecasted
range of earnings per diluted share for fiscal 2005.  Excluding the 2004
one-time gain associated with the sale of the position in Marmot Mountain,
Ltd., in 2004, revised expectations now include an increase in operating
profits of 17 to 19 percent for the year. Fully diluted earnings per share on
an ongoing basis are now forecast to be in the $1.40 to $1.48 range. In
addition, the Company may take certain actions to improve organizational
effectiveness and reduce administrative costs which could result in special
charges.

  For the remainder of 2005, Russell expects the following ranges:

   * Third quarter earnings
       -- Total diluted EPS on an ongoing basis, between $.62 and $.70

   * Fourth quarter earnings
       -- Total diluted EPS on an ongoing basis, between $.52 and $.60

  Conference Call Information


Management will have a conference call today, July 28, 2005, at 8:30 a.m.
Eastern Time to discuss the second quarter results.  The call may be accessed
at (877) 264 -7865 (domestically), and [phone] (internationally), using
conference call ID number 7767816.  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 included
in the Sporting Goods Segment are: Russell Athletic(R), Spalding(R), Brooks(R),
Huffy Sports(R), Bike(R), Moving Comfort(R), AAI(R) and Mossy Oak(R).  The
predominant brand in the Activewear segment is JERZEES(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 certain "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 stockholders, 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 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) risks
associated with the Mossy Oak business; (b) our ability to leverage growth
opportunities; (c) risks associated with our long-term business strategies,
including the integration of the Spalding, AAI and Huffy Sports businesses; (d)
our ability to effect cost reductions and resolve current operational issues;
(e) changes in customer demand for our products; and (f) 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
              (In Thousands Except Share and Per Share Amounts)

                                 Quarter-to-Date           Year-to-Date
                               13 Weeks    13 Weeks    26 Weeks    26 Weeks
                                Ended       Ended       Ended       Ended
                                July 3,     July 4,     July 3,     July 4,
                                 2005        2004        2005        2004
                             (Unaudited) (Unaudited) (Unaudited) (Unaudited)

  Net sales                    $342,099    $289,771    $655,341    $541,564
  Cost of goods sold            251,895     209,426     479,245     396,586
     Gross profit                90,204      80,345     176,096     144,978

  Selling, general and
   administrative expenses       73,186      61,686     146,703     118,164
  Other income - net             (1,023)     (5,247)     (1,568)     (5,109)
     Operating income            18,041      23,906      30,961      31,923

  Interest expense, net          10,064       7,754      18,953      14,941
  Non-controlling interests         747         274       1,421         274

     Income before income
      taxes                       7,230      15,878      10,587      16,708

  Provision for income taxes      2,566       5,716       3,741       6,015

      Net income                 $4,664     $10,162      $6,846     $10,693

  Weighted-average common
   shares outstanding:
     Basic                   32,980,182  32,652,492  32,919,043  32,614,822
     Diluted                 33,540,238  32,836,177  33,368,450  32,843,219

  Net income per common
   share:
     Basic                        $0.14       $0.31       $0.21       $0.33
     Diluted                      $0.14       $0.31       $0.21       $0.33



                             RUSSELL CORPORATION
                         Consolidated Balance Sheets
              (In Thousands Except Share and Per Share Amounts)

                                           July 3,    January 1,   July 4,
                                            2005        2005        2004
     ASSETS                             (Unaudited)    (Note)    (Unaudited)

  Current assets:
       Cash                                 $44,784     $29,816     $21,789
       Accounts receivable, net             268,078     212,063     225,951
       Inventories                          466,089     411,701     424,593
       Prepaid expenses and other
        current assets                       19,752      17,737      23,614
       Income tax receivable                 15,647       6,101      10,353

             Total current assets           814,350     677,418     706,300

  Property, plant & equipment, net          316,246     322,890     317,303

  Other assets                              251,092     253,801     134,161

             Total assets                $1,381,688  $1,254,109  $1,157,764

     LIABILITIES AND STOCKHOLDERS' EQUITY

  Current liabilities:
       Accounts payable and accrued
        expenses                           $172,721    $190,422    $166,347
       Deferred income taxes                 13,721       4,054       6,078
       Short-term debt                       14,975      18,190       9,481
       Current maturities of long-term
        debt                                  2,024       6,938       6,882

             Total current liabilities      203,441     219,604     188,788

  Long-term debt, less current
   maturities                               496,758     372,921     362,072

  Deferred liabilities:
       Income taxes                          23,772      20,286       6,609
       Pension and other                     69,247      64,351      60,790

  Non-controlling interests                  14,842      14,096      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                       38,325      40,716      38,665
       Retained earnings                    760,019     755,799     721,168
       Treasury stock, at cost             (193,247)   (201,171)   (204,943)
       Accumulated other comprehensive
        loss                                (31,883)    (32,907)    (28,147)
             Total stockholders' equity     573,628     562,851     527,157

             Total liabilities &
              stockholders' equity       $1,381,688  $1,254,109  $1,157,764

  Note: Consolidated balance sheet at January 1, 2005 has been derived from
  audited financial statements.



                             RUSSELL CORPORATION
                    Consolidated Statements of Cash Flows
                               (In Thousands)

                                                      26 Weeks Ended
                                              July 3, 2005      July 4, 2004
                                               (Unaudited)       (Unaudited)
  Operating Activities:
       Net income                                 $6,846           $10,693
       Adjustments to reconcile net
        income to net cash used in
        operating activities:
                 Depreciation                     25,304            23,470
                 Amortization                      1,785               615
                 Earnings of non-
                  controlling interests            1,421               274
                 Provision for deferred
                  income taxes                    11,029                 -
                 Gain on sale of assets             (597)           (4,614)
                 Other                             3,830             2,132
                 Changes in operating
                  assets & liabilities:
                      Trade accounts
                       receivable                (63,289)          (46,954)
                      Inventories                (57,469)          (72,821)
                      Prepaid expenses
                       and other
                       current assets             (2,144)             (811)
                      Other assets                  (442)            3,785
                      Accounts payable
                       and accrued
                       expenses                  (10,605)           13,462
                      Income taxes                (9,267)            4,294
                      Pension and other
                       deferred
                       liabilities                 4,896               925
       Net cash used in operating
        activities                               (88,702)          (65,550)
  Investing Activities:
       Purchases of property, plant &
        equipment                                (20,936)          (10,221)
       Proceeds from the sale of
        property, plant & equipment and
        other assets                               2,687             1,769
       Net cash refund from (paid for)
        acquisitions, joint ventures
        and other                                  3,402           (14,758)
       Other                                        (196)            1,469
       Net cash used in investing
        activities                               (15,043)          (21,741)
  Financing Activities:
       Borrowings on credit facility
        and other - net                          118,838            80,424
       Borrowings on short-term debt              (1,889)            1,617
       Dividends on common stock                  (2,626)           (2,605)
       Treasury stock re-issued                    4,484             1,759
       Cost of common stock for
        treasury                                     (30)              (17)
       Net cash provided by financing
        activities                               118,777            81,178
  Effect of exchange rate changes on
   cash                                              (64)              (73)
       Net increase (decrease) in cash            14,968            (6,186)
  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                  $44,784           $21,789

  Supplemental schedule of noncash
   investing and financing activities:
       Sold building - portion of
        proceeds in the form of a note                $-            $1,500
       Sold investment - proceeds in
        the form of stock and cash                     -             9,519
  Noncash investing and financing
   activities                                         $-           $11,019



                             RUSSELL CORPORATION
                    FINANCIAL DATA BY REPORTABLE SEGMENT:
                               (In Thousands)

                                          Q2                 Q2 YTD
                                    13 Weeks Ended       26 Weeks Ended
                                   July 3,   July 4,    July 3,   July 4,
                                    2005      2004       2005      2004
                                (Unaudited)(Unaudited)(Unaudited)(Unaudited)
  NET SALES
  Sporting Goods                  $160,282  $124,122   $325,585  $245,701
  Activewear                       167,833   151,702    298,159   269,117
  All Other                         13,984    13,947     31,597    26,746
  TOTAL NET SALES                 $342,099  $289,771   $655,341  $541,564

  SEGMENT OPERATING INCOME
  Sporting Goods                    $6,956   $12,267 *  $19,399   $24,555 *
  Activewear                        11,868    13,350     14,965    10,750
  All Other                            886     2,018      3,834     3,156
  TOTAL SEGMENT OPERATING INCOME   $19,710   $27,635    $38,198   $38,461

  Reconciliation of total
   segment operating income to
   consolidated income before
   income taxes

  Total Segment operating Income   $19,710   $27,635    $38,198   $38,461
  Unallocated amounts:
  Corporate Expenses                (2,416)   (4,003)    (8,658)   (6,812)
  Interest expense, net            (10,064)   (7,754)   (18,953)  (14,941)
  CONSOLIDATED INCOME BEFORE
   INCOME TAXES                     $7,230   $15,878    $10,587   $16,708

  * Includes one-time gain on the sale of Marmot Mountain, Ltd. of
    $4.4 Million


http://www.newscom.com/cgi-bin/prnh/20030630/RMLCORPLOGO

http://photoarchive.ap.org/

DATASOURCE: Russell Corporation



CONTACT:  Roger Holliday (Financial), [phone], or Nancy Young

(Media), [phone], both of Russell Corporation



Web site:  http://www.russellcorp.com/

Copyright