<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter ended April 2, 2000 Commission file number 0-1790
RUSSELL CORPORATION
(Exact name of registrant as specified in its charter)
Alabama 63-0180720
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
755 Lee Street, Alexander City, Alabama 35011-0272
(Address of principal executive offices) (Zip Code)
(256) 500-4000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
The number of shares outstanding of each of the issuer's classes of common
stock.
Class Outstanding at May 8, 2000
Common Stock, Par Value $.01 Per Share 32,483,165 shares
(Excludes Treasury)
<PAGE> 2
RUSSELL CORPORATION
INDEX
<TABLE>
<CAPTION>
Page No.
<S> <C> <C>
Part I. Financial Information:
Item 1. Financial Statements
Consolidated Condensed Balance Sheets --
April 2, 2000 and January 1, 2000 2
Consolidated Condensed Statements of Operations --
Thirteen Weeks Ended April 2, 2000 and April 4, 1999 3
Consolidated Condensed Statements of Cash Flows --
Thirteen Weeks Ended April 2, 2000 and April 4, 1999 4
Notes to Consolidated Condensed Financial Statements 5
Item 2. Management's Discussion and Analysis of Results of Operations
and Financial Condition 10
Item 3. Quantitative and Qualitative Disclosure of Market Risk 12
Part II. Other Information:
Item 1. Legal Proceedings 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 6. Exhibits and Reports on Form 8-K 13
</TABLE>
-1-
<PAGE> 3
PART I - FINANCIAL INFORMATION
RUSSELL CORPORATION
Consolidated Condensed Balance Sheets
(Dollars in Thousands Except Shares and Per Share Amounts)
<TABLE>
<CAPTION>
APRIL 2, JANUARY 1,
2000 2000
------------- -------------
(Unaudited) (Audited)
<S> <C> <C>
ASSETS
Current assets:
Cash $ 7,664 $ 9,123
Accounts receivable, net 196,052 191,803
Inventories - Note 2 419,597 387,841
Prepaid expenses and other current assets 26,356 26,355
---------- ----------
Total current assets 649,669 615,122
Property, plant & equipment 1,241,255 1,229,943
Less accumulated depreciation (760,724) (747,343)
---------- ----------
480,531 482,600
Other assets 54,358 55,409
---------- ----------
Total assets $1,184,558 $1,153,131
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 135,329 $ 132,841
Federal and state income taxes -- 826
Current maturities of long-term debt 21,414 21,414
---------- ----------
Total current liabilities 156,743 155,081
Long-term debt, less current maturities 416,487 377,865
Deferred liabilities 70,979 70,843
Shareholders' equity:
Common stock, par value $.01 per share;
authorized 150,000,000 shares, issued
41,419,958 shares 414 414
Paid-in capital 48,294 48,294
Retained earnings 715,989 720,111
Treasury stock, at cost (8,863,493 shares
at 4/2/00 and 8,605,925 shares at 1/1/00) (217,533) (213,461)
Accumulated other comprehensive loss (6,815) (6,016)
---------- ----------
Total shareholder's equity 540,349 549,342
---------- ----------
Total liabilities & shareholders' equity $1,184,558 $1,153,131
========== ==========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
-2-
<PAGE> 4
RUSSELL CORPORATION
Consolidated Condensed Statements of Operations
(Dollars in Thousands Except Shares and Per Share Amounts)
(Unaudited)
<TABLE>
<CAPTION>
13 Weeks Ended
--------------------------
April 2, April 4,
2000 1999
------------ -----------
<S> <C> <C>
Net sales $ 251,982 $ 233,177
Costs and expenses:
Cost of goods sold 187,297 176,795
Selling, general and administrative expenses 54,176 51,526
Other - net 2,812 21,599
Interest expense 6,877 6,892
----------- -----------
251,162 256,812
----------- -----------
Income (loss) before income taxes 820 (23,635)
Provision (benefit) for income taxes 354 (9,284)
----------- -----------
Net income (loss) $ 466 $ (14,351)
=========== ===========
Weighted-average common shares outstanding:
Basic 32,657,233 34,951,939
Diluted 32,673,535 34,951,939
Net income (loss) per common share:
Basic $ 0.01 $ (0.41)
Diluted 0.01 (0.41)
Cash dividends per common share $ 0.14 $ 0.14
</TABLE>
See accompanying notes to consolidated condensed financial statements.
-3-
<PAGE> 5
Consolidated Condensed Statements of Cash Flows
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
13 Weeks Ended
----------------------
April 2, April 4,
2000 1999
---------- --------
<S> <C> <C>
Operating Activities:
Net income (loss) $ 466 $(14,351)
Adjustments to reconcile net income (loss) to
cash used in operating activities:
Depreciation and amortization 13,833 18,452
Deferred income taxes -- (2,718)
(Gain) loss on sale of property, plant & equipment (176) 295
Non-cash restructuring, asset impairment and
other unusual charges 1,512 19,089
Changes in operating assets and liabilities:
Trade accounts receivable (2,836) 8,931
Inventories (32,493) (30,728)
Prepaid expenses and other current assets 297 (1,918)
Other assets (1,021) 1,495
Accounts payable and accrued expenses 3,209 1,058
Income taxes (1,409) (14,978)
Pension and other deferred liabilities 178 632
-------- --------
Net cash used in operating activities (18,440) (14,741)
Investing Activities:
Purchases of property, plant & equipment (14,191) (10,341)
Proceeds from the sale of property, plant & equipment 1,068 327
-------- --------
Net cash used in investing activities (13,123) (10,014)
Financing Activities:
Borrowings on credit facility - net 38,889 --
Short-term borrowings -- 47,525
Dividends on common stock (4,586) (4,929)
Cost of common stock for treasury (4,072) (20,842)
-------- --------
Net cash provided by financing activities 30,231 21,754
Effect of exchange rate changes on cash (127) 150
-------- --------
Net decrease in cash (1,459) (2,851)
Cash balance at beginning of period 9,123 13,852
-------- --------
Cash balance at end of period $ 7,664 $ 11,001
======== ========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
-4-
<PAGE> 6
RUSSELL CORPORATION
Notes to Consolidated Condensed Financial Statements
1. In the opinion of Management, the accompanying audited and unaudited
consolidated condensed financial statements contain all adjustments
(consisting of only normal recurring accruals) necessary to present fairly
the financial position as of April 2, 2000, and January 1, 2000, and the
results of operations and cash flows for the thirteen week periods ended
April 2, 2000, and April 4, 1999.
The accounting policies followed by the Company are set forth in Note One
to the Company's consolidated financial statements in Form 10-K for the
year ended January 1, 2000.
Reclassifications:
Certain prior year amounts have been reclassified to conform to fiscal year
2000 presentation. These changes had no impact on previously reported
results of operations or stockholders' equity.
2. The components of inventory consist of the following: (In thousands)
<TABLE>
<CAPTION>
4/2/00 1/1/00
-------- --------
<S> <C> <C>
Finished goods $300,725 $279,212
Work in process 82,023 68,297
Raw materials and supplies 41,805 45,288
-------- --------
424,553 392,797
LIFO reserve (4,956) (4,956)
-------- --------
$419,597 $387,841
======== ========
</TABLE>
3. On July 22, 1998, the Company announced the Board of Directors had approved
a three-year restructuring and reorganization plan to improve the Company's
global competitiveness. Consequently, the results of operations for the
thirteen weeks ended April 2, 2000, are not necessarily indicative of the
results to be expected for the full year. The financial statements for the
thirteen weeks ended April 2, 2000, include non-recurring charges of
approximately $9,348,000 pre-tax, (equivalent to $.18 on an after-tax per
share basis), related primarily to severance expenses, asset impairments,
and adjustments to depreciation expense related to assets involved in the
Company's restructuring plans.
-5-
<PAGE> 7
THE CHARGES REFLECTED IN THE STATEMENTS OF OPERATIONS ARE AS FOLLOWS:
(In thousands)
<TABLE>
13 Weeks Ended 13 Weeks Ended
4/2/00 4/4/99
------------- --------------
<S> <C> <C>
Restructuring charges
Employee termination charges $5,405 $ 3,961
Exit cost related to facilities 1,121 3,849
------ -------
$6,526 $ 7,810
====== =======
Asset impairment charges:
Impairment of facilities used in operation $ -- $13,389
Impairment of facilities and equipment
held for disposal 1,512 5,701
------ -------
$1,512 $19,090
====== =======
Other unusual charges
Accelerated depreciation on facilities and
equipment to be taken out of service $ 497 $ 2,226
Expenses associated with the establishment
of dual headquarters 522 775
Other 291 0
------ -------
$1,310 $ 3,001
------ -------
TOTALS BEFORE TAX $9,348 $29,901
====== =======
TOTALS AFTER TAX $5,608 $17,941
====== =======
</TABLE>
THESE CHARGES HAVE BEEN CLASSIFIED IN THE STATEMENTS OF OPERATIONS AS FOLLOWS:
(In thousands)
<TABLE>
<S> <C> <C>
Cost of goods sold $5,660 $ 7,336
Selling, general and administrative expenses 522 775
Other - net 3,166 21,790
------ -------
$9,348 $29,901
====== =======
</TABLE>
CHARGES RECORDED BY SEGMENTS FOR FIRST QUARTER 2000 WERE RECORDED AS FOLLOWS:
(In thousands)
<TABLE>
Restructuring Asset Impairments Other Unusual
Charges Charges Charges
------------- -------------- -------------
<S> <C> <C> <C>
Activewear $5,461 $ 1,512 $1,310
International 1,065
All Other
------ ------- ------
$6,526 $ 1,512 $1,310
====== ======= ======
Grand Total $9,348
======
</TABLE>
A SUMMARY OF THE ACTIVITY RELATED TO THE RESTRUCTURING, ASSET IMPAIRMENT
AND OTHER UNUSUAL CHARGES IS AS FOLLOWS: (In thousands)
<TABLE>
Liability at Expense Amount Liability at
January 1, 2000 Incurred Paid April 2, 2000
--------------- ---------- -------- --------------
<S> <C> <C> <C> <C>
Cash Related:
Exit cost related to facilities $ 534 $ 1,121 $1,655 $ --
Employee termination charges 4,770 5,405 2,453 7,722
Other 1,223 813 285 1,751
------ ------- ------ ------
$6,527 $ 7,339 $4,393 $9,473
====== ======= ====== ======
Non-cash related:
Impairment charges and accelerated depreciation $ 2,009
-------
$ 2,009
=======
</TABLE>
===============================================================================
At April 2, 2000, the Company held for sale certain closed facilities with an
adjusted carrying value of approximately $61.3 million, which have been included
in property, plant and equipment.
During the first quarter of 2000, the Company continued to move sewing
operations to a combination of owned and contractor locations in Central America
and Mexico. The Company announced the closing of four domestic apparel
operations and one textile research facility. During the quarter approximately
500 employees were notified of their termination and received detailed
information on their individual severance packages when the facility closings
were announced.
-6-
<PAGE> 8
4. In November 1998, a jury in Jefferson County, Alabama returned a verdict in
Sullivan, et al. v. Russell Corporation, et al. Five plaintiff families
were awarded a total of $155,200 in compensatory damages for property
damage and $52,398,000 in punitive damages from the three defendants,
Russell Corporation, Avondale Mills, Inc. and Alabama Power Company.
Allegations in the case were that textile discharges of two of the
defendants, including Russell Corporation, which were treated at a
wastewater treatment plant of the City of Alexander City, Alabama and
thereafter discharged into Lake Martin, constituted a nuisance and indirect
trespass. Alabama Power Company, the third defendant, was alleged to have
allowed the nuisance and trespass to continue as the owner of the land
under the lake. The plaintiffs alleged mental anguish but no damages were
granted for this claim. No allegation of personal injury was made in the
case.
The Company believes that the verdict is contrary to the evidence presented
in the case and, under applicable law, no damages should have been awarded.
The Company's appeal is pending before the Alabama Supreme Court. If such
appeal proves to be unsuccessful, damages associated with this matter could
have a significant adverse effect on the Company's future results from
operations and its ability to comply with certain debt covenant
requirements.
As management believes that the amount of the final verdict should be
overturned on appeal or the amount of the final verdict should be
significantly reduced, no immediate assessment can be made of the impact on
the Company's consolidated financial statements, liquidity or the Company's
ability to comply with its loan agreements. Accordingly, no accrual for
this contingency has been recorded as of April 2, 2000.
On February 23, 1999, a similar law suit was filed in Jefferson County,
Alabama by two former residents of the same residential subdivision, and on
January 13, 2000, another lawsuit was filed in Jefferson County, Alabama by
15 families owning property adjacent to Lake Martin. The suits seek
unspecified damages for alleged nuisance and trespass. The Company plans to
vigorously defend these suits.
By letter dated January 13, 2000, the Company was notified by the United
States Department of Justice (DOJ) that the DOJ intended to institute legal
proceedings against the Company and certain other parties alleging
violations by those parties of the Clean Water Act in connection with the
treatment and discharge of waste at a water treatment facility operated by
the City of Alexander City, Alabama. Preliminary discussions are being held
with the DOJ with regard to the proposed suit by the DOJ. The Company
believes it is in compliance with the Clean Water Act and will vigorously
oppose the imposition of any monetary penalties or injunctive relief in any
lawsuit that may be filed.
5. Earnings per share calculated in accordance with SFAS 128, Earnings Per
Share, are as follows: (In thousands except shares and per share amounts)
<TABLE>
<CAPTION>
13 Weeks Ended
--------------------------
4/2/00 4/4/99
----------- -----------
<S> <C> <C>
Net income (loss) $ 466 $ (14,351)
Basic Calculation:
Weighted-average common shares outstanding 32,657,233 34,951,939
----------- -----------
Net income (loss) per share-basic $ 0.01 $ (0.41)
----------- -----------
Diluted Calculation:
Weighted-average common shares outstanding 32,657,233 34,951,939
Net common shares issuable on exercise
of dilutive stock options 16,302 --
----------- -----------
32,673,535 34,951,939
----------- -----------
Net income (loss) per share-diluted $ 0.01 $ (0.41)
=========== ===========
</TABLE>
-7-
<PAGE> 9
6. For the period ended April 2, 2000 and April 4, 1999, accumulated other
comprehensive loss as shown in the consolidated condensed balance sheets
was comprised of foreign currency translation adjustments. The components
of comprehensive income, net of tax, for these periods were as follows: (In
thousands)
<TABLE>
<CAPTION>
13 Weeks Ended
-----------------------------
04/2/00 04/4/99
--------- ---------
<S> <C> <C>
Net income (loss) $ 466 $(14,351)
Translation loss (799) (2,308)
--------- --------
Comprehensive loss $ (333) $(16,659)
========= ========
</TABLE>
7. Russell Corporation has two reportable segments: activewear and
international operations. The Company's activewear segment consists of
three strategic business units that sell the following products to sporting
goods dealers, department and specialty stores, mass merchants, wholesale
clubs, college bookstores, screen printers, distributors, golf pro shops
and mail order catalogs: T-shirts, fleece products (such as sweatshirts and
pants), athletic uniforms and knit shirts. The international strategic
business unit manufactures and sources activewear products distributed to
international locations in approximately 50 countries. Other segments that
do not meet the quantitative thresholds for determining reportable segments
sell fabrics to other apparel manufacturers, and manufacture and sell socks
to mass merchants. These are included in the "All Other" data presented
herein.
The Company evaluates performance and allocates resources based on profit
or loss from operations before interest, income taxes, restructuring,
reorganization and other unusual charges. The accounting policies of the
reportable segments are the same as those described in Note One to the
Company's consolidated financial statements in Form 10-K for the year ended
January 1, 2000, except that inventories are valued on a Standard basis at
the segment level, where a substantial portion of inventories are valued on
a Last-In, First-Out (LIFO) basis in the consolidated financial statements.
Intersegment transfers are recorded at the Company's cost; there is no
intercompany profit or loss on intersegment transfers.
The Company's reportable segments offer various similar products and/or
operate in various locations. The reportable segments are each managed
separately because of the geographic locations they serve.
<TABLE>
<CAPTION>
13 Weeks ended April 2, 2000
----------------------------
(Dollars in Thousands)
Activewear International All Other Total
---------- ------------- --------- ---------
<S> <C> <C> <C> <C>
Net sales $196,744 $ 28,435 $ 26,803 $ 251,982
Depreciation and amortization expense 11,659 611 1,066 13,336
Segment EBIT 19,801 (2,368) 5,096 22,529
Total assets 981,048 116,176 87,334 1,184,558
</TABLE>
<TABLE>
<CAPTION>
13 Weeks ended April 2, 1999
----------------------------
(Dollars in Thousands)
Activewear International All Other Total
---------- ------------- --------- ---------
<S> <C> <C> <C> <C>
Net sales $174,948 $ 29,737 $ 28,492 $ 233,177
Depreciation and amortization expense 14,302 763 1,161 16,226
Segment EBIT 13,838 469 4,676 18,983
Total assets 948,669 115,033 93,211 1,156,913
</TABLE>
-8-
<PAGE> 10
A reconciliation of combined EBIT for the three segments to consolidated income
(loss) before income taxes is as follows: (In thousands)
<TABLE>
<CAPTION>
13 Weeks Ended
-------------------------
4/2/00 4/4/99
------- -------
<S> <C> <C>
Total segment EBIT $22,529 $ 18,983
Restructuring, asset impairment, and
other unusual charges (9,348) (29,901)
Unallocated amounts:
Corporate expenses (5,484) (5,825)
Interest expense (6,877) (6,892)
------- -------
Income (loss) before income taxes $ 820 $(23,635)
</TABLE>
[This Space left Blank Intentionally]
-9-
<PAGE> 11
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition
RESULTS OF OPERATIONS
The following is Management's Discussion and Analysis of certain
significant factors which have affected the Company's financial condition and
earnings during the periods included in the accompanying consolidated condensed
statements of operations.
THIRTEEN WEEKS ENDED APRIL 2, 2000 COMPARED TO APRIL 4, 1999
NET SALES. Net sales increased 8.1%, or $18,805,000, to $251,982,000 for
first quarter 2000 from $233,177,000 during the comparable prior year period.
The overall net increase consisted of a 12.5% increase, or $21,796,000 within
the Company's Activewear segment; a 4.4% decline, or $1,302,000 within the
Company's International segment; and a 5.9% decrease, or $1,689,000, for all
other segments. The majority of the sales increase within the Activewear segment
was due to strong sales within the artwear market of the Company's JERZEES brand
of activewear. Dozens shipped within the artwear market were up approximately
50% over the comparable prior year period. The Russell Athletic brand
experienced a 4.5% sales increase while the Cross Creek brand experienced a 2.6%
sales decrease over the comparable prior year period. The sales decline within
the Cross Creek brand was primarily attributable to its sales mix as dozens
shipped remained flat as compared to the prior year period.
GROSS MARGIN %. The Company's overall gross margin percentage increased to
25.7% for first quarter 2000 versus 24.2% in the comparable prior year period.
Excluding the impact of restructuring, asset impairment and other unusual
charges ("special charges"), as described in Note 3 to the consolidated
condensed financial statements, of $5,660,000 and $7,336,000 for 2000 and 1999,
respectively, the overall gross margin percentage increased to 27.9% for 2000
from 27.3% for 1999. Gross margins were primarily impacted by the increase in
sales mentioned above. Gross margins also continue to be positively impacted by
the reduction in manufacturing cost as a result of the Company's continued
efforts to move the assembly of garments to low cost geographic locations.
SELLING, GENERAL AND ADMINISTRATIVE (SG&A). SG&A as a percent of net sales
decreased to 21.5% for first quarter 2000 versus 22.1% in the comparable prior
year period. Excluding the impact of special charges of $522,000 and $775,000
for 2000 and 1999, respectively, SG&A as a percent of net sales decreased to
21.3% for 2000 from 21.8% for 1999. This decrease is attributable to increased
sales mentioned above and lower distribution costs as a result of the major
reconfiguration of our key activewear distribution facilities during 1999. These
savings continue to be partially offset as the Company continues to increase its
advertising and marketing spending over that of prior years in an effort to
raise brand awareness within the market of our JERZEES, Russell Athletic and
Cross Creek brands.
EARNINGS BEFORE INTEREST AND TAXES (EBIT). The Company's overall EBIT as
a percent of net sales increased to 6.8% for first quarter 2000 from 5.6% in the
comparable prior year period when calculated exclusive of special charges of
$9,348,000 and $29,901,000 for 2000 and 1999, respectively. The Activewear
segment EBIT, exclusive of special charges, as a percent of net sales is 10.1%
for first quarter 2000 up from 7.9% for first quarter 1999. Again, this
improvement is attributed primarily to the increased sales mentioned above and
to reduced manufacturing costs associated with the continued move of much of the
Company's apparel assembly operations offshore. The International segment EBIT,
exclusive of special charges, as a percent of net sales decreased to a negative
8.3% for first quarter 2000 down from 1.6%, or $2,837,000, for first quarter
1999. The majority of the decline within the International segment was caused
due to the fall in the value of the Euro against the US dollar, which adversely
impacted both sales and margins in Europe. Additionally, the International
segment incurred higher freight and distribution costs than in the prior year as
a result of product shipping delays at the Company's Europe facility.
-10-
<PAGE> 12
Liquidity and Capital Resources
At the end of the quarter, the current ratio was 4.1, up from last year's
3.2 primarily because prior year current liabilities contained short-term debt
of $60,123,000. All short-term debt was converted to long-term debt when the
Company entered into a new credit facility during 4th quarter 1999. (See Note 2
to the Consolidated Financial Statements in our Annual Report on Form 10-K for
further details concerning the Company's credit facility). Exclusive of
short-term debt, the prior year current ratio was 4.6. Total debt to
capitalization was 44.8% and 42.0% at April 2, 2000 and April 4, 1999,
respectively.
Required cash for purchases of property, plant and equipment, dividends and
treasury stock purchases was provided by borrowings under the Company's credit
facility (long-term debt) during the period ended April 2, 2000.
Approximately 260,000 shares of the Company's common stock were repurchased
during the quarter ended April 2, 2000 for a total of approximately $4,072,000.
Contingencies
For information concerning ongoing litigation of the Company, see Note 4 to
the Consolidated Condensed Financial Statements.
Impact of Recently Issued Accounting Standards
In June 1998, the FASB issued Statement No. 133, Accounting for Derivative
Instruments and Hedging Activities. The Company plans to adopt the new Statement
effective beginning fiscal 2001. The Statement will require the Company to
recognize all derivatives on the balance sheet at fair value. Derivatives that
are not hedges must be adjusted to fair value through income. If a derivative is
a hedge, depending on the nature of the hedge, changes in the fair value of the
derivative will either be offset against the change in fair value of the hedged
asset, liability, or firm commitment through earnings, or recognized in other
comprehensive income until the hedged item is recognized in earnings. The
ineffective portion of a derivative's change in fair value will be immediately
recognized in earnings. The Company has not yet completed its analysis of the
impact, if any, that Statement 133 may have on its financial statements.
FORWARD LOOKING INFORMATION
This quarterly report on Form 10-Q, including management's discussion and
analysis, contains certain statements that describe the Company's beliefs
concerning future business conditions and prospects, growth opportunities, new
product lines and the outlook for the Company based upon currently available
information. Wherever possible, the Company has identified these
"forward-looking" statements (as defined in Section 21E of the Securities and
Exchange Act of 1934) by words such as "anticipates," "believes," "estimates,"
"expects," "projects" and similar phrases. These forward-looking statements are
based upon assumptions the Company believes are reasonable. Such forward-looking
statements are subject to risks and uncertainties which could cause the
Company's actual results, performance and achievements to differ materially from
those expressed in, or implied by, these statements, including among other
matters, significant competitive activity, including promotional and price
competition, changes in customer demand for the Company's products, inherent
risks in the market place associated with new products and new product lines,
including uncertainties about trade and consumer acceptance and other risk
factors listed from time to time in the Company's SEC reports and announcements.
The Company assumes no obligation to update publicly any forward-looking
statements whether as a result of new information, future events or otherwise.
-11-
<PAGE> 13
ITEM 3. Quantitative and Qualitative Disclosure of Market Risk
The Company is exposed to market risks relating to fluctuations in interest
rates, currency exchange rates and commodity prices. There has been no material
change in the Company's market risks that would significantly affect the
disclosures made in our Annual Report on Form 10-K for the year ended January 2,
2000.
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings
Contingencies
For information concerning ongoing litigation of the Company, see Note 4 to
the Consolidated Condensed Financial Statements.
ITEM 4. Submission of Matters to a Vote of Security Holders
a) The Annual Meeting of Shareholders was held on April 19, 2000.
At the Annual meeting, shareholders voted upon the following nominees to
serve as Directors for a three-year term expiring in 2003. The results of the
vote are as follows:
<TABLE>
<CAPTION>
Name For Withheld
---- --- --------
<S> <C> <C>
John F. Ward 25,945,923 3,401,509
Eric N. Hoyle 29,042,392 305,040
Benjamin Russell 29,045,510 301,922
Margaret M. Porter 29,045,101 302,331
</TABLE>
All nominees were elected.
C. V. Nalley, III, John R. Thomas, John A. White and Tim Lewis will
continue in office until their terms expire in 2001. Herschel M. Bloom and
Ronald G. Bruno will continue in office until their terms expire in 2002.
b) The shareholders voted on approval of the Russell Corporation 2000
Employee Stock Purchase Plan. The results of the vote are as follows:
<TABLE>
<CAPTION>
For Against Abstain
<S> <C> <C>
28,260,790 991,635 95,592
</TABLE>
The proposed plan was approved.
c) The shareholders also voted on approval of the Amendment and Restatement
of the Russell Corporation 1993 Executive Long Term Incentive Plan as the
Russell Corporation Executive Incentive Plan. The results of the vote are as
follows:
<TABLE>
<CAPTION>
For Against Abstain
<S> <C> <C>
21,126,571 8,106,789 114,657
</TABLE>
The proposed Amendment to the Plan was approved.
-12-
<PAGE> 14
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 10.1 - Russell Corporation Executive Incentive Plan (an
amendment and restatement of the Russell Corporation 1993
Executive Long-Term Incentive Plan) (incorporated by reference to
pages B-1 through B-3 of the Registrant's Proxy Statement dated
March 16, 2000 which Proxy Statement was filed as Exhibit (10g)
to the Registrant's Annual Report on Form 10-K for year ended
January 2, 2000)
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RUSSELL CORPORATION
-------------------------------------------
(Registrant)
Date May 11, 2000 /s/Eric N. Hoyle
-------------------------------------------
Eric N. Hoyle, Executive Vice President
and Chief Financial Officer
(For the Registrant and as
Principal Financial Officer)
-13-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF RUSSELL CORPORATION FOR THE THREE MONTHS ENDED APRIL 2,
2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-30-2000
<PERIOD-END> APR-02-2000
<CASH> 7,664
<SECURITIES> 996
<RECEIVABLES> 203,433
<ALLOWANCES> (7,381)
<INVENTORY> 419,597
<CURRENT-ASSETS> 649,669
<PP&E> 1,241,255
<DEPRECIATION> (760,724)
<TOTAL-ASSETS> 1,184,558
<CURRENT-LIABILITIES> 156,743
<BONDS> 416,487
0
0
<COMMON> 414
<OTHER-SE> 539,935
<TOTAL-LIABILITY-AND-EQUITY> 1,184,558
<SALES> 251,982
<TOTAL-REVENUES> 251,982
<CGS> 187,297
<TOTAL-COSTS> 54,176
<OTHER-EXPENSES> 2,812
<LOSS-PROVISION> 1,167
<INTEREST-EXPENSE> 6,877
<INCOME-PRETAX> 820
<INCOME-TAX> 354
<INCOME-CONTINUING> 466
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 466
<EPS-BASIC> 0.01
<EPS-DILUTED> 0.01
</TABLE>
