– Strong Year Concludes with Record Sales, Profit Margins, Cash Flow
and EPS
– Fourth-Quarter Results Strong Despite Uneven Retail Environment
– 2014 Full-Year Guidance Raised, Including Adjusted EPS Expectations
of $4.60 to $4.80
WINSTON-SALEM, N.C.--(BUSINESS WIRE)--Jan. 29, 2014--
HanesBrands (NYSE: HBI), a leading marketer of everyday basic apparel
under world-class brands, today reported record financial results in
2013 for net sales, operating profit and profit margin, cash flow, and
diluted earnings per share.
The company closed the year with a strong fourth quarter and has
substantially raised its 2014 full-year EPS guidance.
Net sales in the fourth quarter increased 12 percent to $1.29 billion
compared with the year-ago quarter. The acquisition of Maidenform
Brands, Inc., contributed 9 percentage points of sales growth in the
quarter, while strong results for the remainder of the company
contributed 3 percentage points of growth. For the full year, net sales
increased 2 percent to $4.63 billion, while on a constant-currency
basis, net sales increased 3 percent.
Adjusted EPS for the year increased 49 percent to $3.91 from $2.62 in
2012. For the fourth quarter, adjusted EPS of $0.98 beat company
guidance. Planned increases in advertising and debt-reduction costs
muted fourth-quarter performance compared with the year-ago quarter’s
adjusted EPS of $1.07. On a GAAP basis, diluted EPS was $0.32 in the
quarter versus $0.78 a year ago and was $3.25 for the year, up from
$2.32 a year ago.
(Adjusted performance measures and comparisons exclude fourth-quarter
2013 charges related to the acquisition of Maidenform Brands, other
action-related charges in the fourth quarter of 2013, debt actions in
the fourth quarter of 2012, and reflect continuing operations for 2012.
See sections on discontinued operations and GAAP reconciliation.)
The company earned record adjusted operating profit of $596 million in
2013 for an adjusted operating margin of 12.9 percent, up 320 basis
points. Improved profitability resulted from lower cotton costs and
benefits of the company’s Innovate-to-Elevate initiatives. On a GAAP
basis, operating profit for the quarter was $72 million, compared with
$153 million a year ago, and for full-year 2013 was $515 million, up
from $440 million, for an operating margin of 11.1 percent compared with
9.7 percent.
For 2014, Hanes has increased its full-year guidance to expected net
sales of slightly less than $5.1 billion; adjusted operating profit of
$640 million to $660 million; adjusted EPS of $4.60 to $4.80; and net
cash from operating activities of $450 million to $550 million.
“We had an outstanding year in 2013 with four consecutive quarters of
strong performance. We achieved record results and reached significant
milestones, including generating nearly $600 million of cash from
operations,” Hanes Chairman and Chief Executive Officer Richard A. Noll
said. “We are raising our 2014 earnings guidance because we are
increasingly confident that the momentum of our Innovate-to-Elevate
strategy will deliver even better results. The combination of our brand
power, low-cost supply chain and innovation platforms is generating
value and growth opportunities.”
Fourth-Quarter and Full-Year 2013 Financial
Highlights and Business Segment Summary
Key accomplishments for 2013 include:
-
Margin Expansion through Innovate-to-Elevate Success. For the
year, Hanes’ two largest business segments – Innerwear and
Activewear – delivered double-digit and triple-digit operating profit
growth, respectively, and double-digit operating profit margin,
benefiting from Innovate-to-Elevate success. The company’s brands are
gaining share, supply chain initiatives are creating efficiencies, and
innovative product platforms are performing well.
-
Strong Balance Sheet, Working Capital Improvement and Cash from
Operations. Hanes generated a record $591 million of net cash from
operating activities in 2013. Inventory excluding Maidenform decreased
by $100 million, on 13 percent fewer units. The company used cash to
complete its multiyear bond debt reduction plan, instituted a regular
quarterly cash dividend for stockholders, and acquired Maidenform
Brands.
-
Maidenform Acquisition Completed and Integration Under Way.
Hanes closed its acquisition of Maidenform on Oct. 7, 2013, for
approximately $581 million and incurred acquisition- and other
action-related charges of approximately $80 million in the fourth
quarter. Hanes is in the process of integrating Maidenform’s
front-end, supply chain, and distribution/logistics operations into
its existing organization.
In the fourth quarter,
Maidenform contributed net sales of approximately $100 million and
operating profit of approximately $1 million.
Key segment highlights include:
Innerwear Segment. Innerwear net sales increased 20 percent in
the fourth quarter and 5 percent for the full year. While Maidenform
sales significantly contributed to growth, non-Maidenform sales also
increased in each period. Operating profit declined $5 million as a
result of $17 million of increased advertising investment.
-
Strong Fourth-Quarter Sales. Excluding Maidenform
contributions, sales increased 6 percent in the fourth quarter. Sales
of socks and panties were up double digits, men’s underwear up high
single digits, and bras up mid-single digits. For the year, excluding
Maidenform, net sales increased 1 percent with socks and men’s
underwear driving growth.
-
Market Share Increases and Innovate-to-Elevate Success. The
company’s brands gained market share during the fourth quarter, and
Innovate-to-Elevate product platforms continue to succeed. Hanes
ComfortBlend socks and men’s underwear, Hanes X-Temp underwear,
and Smart Size bras across several brands, including Bali, are
all outperforming their respective categories.
Activewear Segment. The Activewear segment, previously known as
Outerwear, ended a successful year with strong fourth-quarter results –
net sales up 1 percent and operating profit up 9 percent. For the year,
operating profit increased by $98 million on a net sales decline of 1
percent.
-
Strong Profitability. The segment delivered record
profitability with an operating margin of 13.1 percent for the full
year. Champion activewear, Hanes activewear and Gear for
Sports all had double-digit operating margins in the fourth quarter
and full year.
-
Higher Quality of Sales. For the year, Activewear net sales
increased 1 percent, excluding the $25 million decline in sales for
the branded printwear business, which de-emphasized commodity sales.
Sales for Champion activewear and Gear for Sports each
increased by mid-single digits for the year.
International Segment. Currency had a significant impact on
International net sales and profits. On a constant-currency basis,
International net sales increased 10 percent in the fourth quarter and 7
percent for the full year. Maidenform sales contributed to sales growth.
Operating profit on a constant-currency basis increased 1 percent in the
fourth quarter and was comparable to last year for the full year.
Direct to Consumer Segment. The Direct to Consumer segment
achieved significantly improved profitability for the year. The
segment’s operating profit increased 31 percent and 34 percent for the
fourth quarter and full year, respectively. Direct to Consumer net sales
for the fourth quarter increased 14 percent and for the full year
increased 2 percent, with Maidenform sales contributing to growth.
2014 Guidance
Hanes has significantly increased its earnings outlook for 2014 and has
established guidance for other financial performance measures.
For 2014, Hanes expects net sales of slightly less than $5.1 billion;
adjusted operating profit excluding actions of $640 million to $660
million; adjusted EPS excluding actions of $4.60 to $4.80; and net cash
from operating activities of $450 million to $550 million.
The company expects its acquisition of Maidenform to contribute
approximately $500 million in sales and approximately $25 million of
operating profit in 2014.
Interest expense and other expense are expected to be approximately $85
million combined. The full-year tax rate is expected to be in the low
teens. As is typical, Hanes expects its tax rate will fluctuate by
quarter, with the rate being slightly higher in the first half of the
year.
The company expects to make pension contributions of approximately $60
million and net capital expenditures of approximately $60 million to $70
million.
The company expects slightly more than 103 million weighted average
shares outstanding in 2014.
Maidenform Integration
Hanes expects to achieve full synergies from the integration of its
Maidenform acquisition within three years. After full synergies, the
acquisition is expected to annually contribute more than $500 million in
net sales, $80 million in operating profit, and $0.60 of EPS.
Synergies are expected from selling, general and administrative savings
as a result of the elimination of duplicative corporate and operational
costs; cost of goods sold savings as a result of the integration of
Maidenform’s 100 percent sourced production model into Hanes’
predominately self-owned manufacturing operations, supplemented by
sourcing; and complementary revenue, driven by the application of Hanes’
Innovate-to-Elevate strategy to Maidenform’s products.
Hanes is integrating Maidenform’s sales and marketing, supply chain, and
distribution/logistics operations into its existing organization. The
company anticipates closing the Maidenform New Jersey headquarters and
Fayetteville, N.C., distribution center by the end of 2014.
The majority of the corporate SG&A savings are anticipated to begin by
mid-2014. Benefits of supply chain actions to cost of goods sold are
expected to start in 2015 and be fully realized in 2016. Complementary
revenue opportunities are expected to deliver benefits in late 2015,
with the majority of the benefits coming in 2016.
Hanes has updated its quarterly frequently-asked-questions document,
which is available at www.Hanes.com/faq.
Discontinued Operations
In 2012, the company announced it was exiting certain international and
domestic imagewear businesses that are now classified as discontinued
operations. Discontinued operations have no effect on 2013 results.
On May 30, 2012, Hanes sold its European imagewear business, and the
company subsequently completed in 2012 the discontinuation of its
private-label and Outer Banks domestic imagewear operations serving
wholesalers that sell to the screen-print industry. In accordance with
generally accepted accounting principles, the company reported results
for the second, third and fourth quarters of 2012 on a
continuing-operations basis and revised prior-period results, including
the first quarter of 2012, to reflect continuing operations. The
company’s branded printwear operations continue to operate and serve the
domestic screen-print market with Hanes and Champion brand
products.
For 2012, discontinued operations reported a loss per diluted share of
$0.68 – a loss of $0.03 in the first quarter, a loss of $0.66 in the
second quarter, a loss of $0.01 in the third quarter, and earnings of
$0.02 in the fourth quarter.
The company has provided information on discontinued operations and
financial results for prior periods, including posting a five-year
history of results from continuing operations. The information is
available in the investors section of the company’s corporate website, www.Hanes.com/investors.
Charges for Actions and Reconciliation to GAAP
Measures
Adjusted EPS, adjusted operating profit (and margin), free cash flow,
and adjusted EBITDA are not generally accepted accounting principle
measures. Hanes has chosen to provide these non-GAAP measures to
investors to enable additional analyses of past, present and future
operating performance and as a supplemental means of evaluating company
operations. Non-GAAP measures should not be considered a substitute for
financial information presented in accordance with GAAP and may be
different from non-GAAP or other pro forma measures used by other
companies.
Adjusted EPS is defined as diluted EPS excluding actions and the tax
effect on actions. The company believes that adjusted EPS provides
investors with an additional means of analyzing the company’s
performance absent the effect of acquisition-related expenses and other
actions. See Table 5 attached to this press release to reconcile
adjusted diluted EPS to GAAP diluted EPS.
Adjusted operating profit is defined as operating profit excluding
actions, and the company believes that the measure provides investors
with an additional means of analyzing the company’s performance absent
the effect of acquisition-related expenses and other actions.
Free cash flow is defined as net cash from operating activities less net
capital expenditures. Free cash flow may not be representative of the
amount of residual cash flow that is available to the company for
discretionary expenditures since it may not include deductions for
mandatory debt-service requirements and other nondiscretionary
expenditures. The company believes, however, that free cash flow is a
useful measure of the cash-generating ability of the business relative
to capital expenditures and financial performance. See Table 4 and its
footnotes attached to this press release to reconcile free cash flow
with the GAAP measure of net cash provided by operating activities.
Adjusted EBITDA is defined as earnings from continuing operations before
interest, taxes, depreciation, amortization, and debt-prepayment
expenses. Although the company does not use EBITDA to manage its
business, it believes that EBITDA is another way that investors measure
financial performance. See Table 2 attached to this press release to
reconcile adjusted EBITDA with the GAAP measure of net income from
continuing operations.
For 2014 guidance, adjusted EPS is defined as diluted EPS excluding
actions and the tax effect on actions, and adjusted operating profit is
defined as operating profit excluding actions. Hanes’ current estimate
for pretax charges in 2014 for acquisition and other actions is
approximately $70 million to $100 million or more, but actual charges
could vary significantly. The company believes guidance for adjusted EPS
and adjusted operating profit provides investors with an additional
means of analyzing the company’s performance absent the effect of
acquisition-related expenses and other actions.
On a GAAP basis, full-year 2014 diluted EPS will vary depending on
actual performance, charges and tax rate. GAAP diluted EPS could be in
the range of $3.80 to $4.30. GAAP operating profit for 2014 could be in
the range of $540 million to $590 million.
Webcast Conference Call
Hanes will host an Internet webcast of its quarterly investor conference
call at 4:30 p.m. EST today. The broadcast, consisting of prerecorded
remarks followed by a live question-and-answer session, may be accessed
at www.Hanes.com/investors.
The call is expected to conclude by 5:30 p.m.
An archived replay of the conference call webcast will be available at www.Hanes.com/investors.
A telephone playback will be available from approximately midnight EST
today through midnight EST Feb. 5, 2014. The replay will be available by
calling toll-free (855) 859-2056, or by toll call at (404) 537-3406. The
replay pass code is 35514607.
Cautionary Statement Concerning Forward-Looking Statements
This press release contains certain “forward-looking statements,” as
defined under U.S. federal securities laws, with respect to our
long-term goals and trends associated with our business, as well as
guidance as to future performance. In particular, among others,
statements following the heading “2014 Guidance,” as well as statements
about the benefits anticipated from the Maidenform acquisition, are
forward-looking statements. These forward-looking statements are based
on our current intent, beliefs, plans and expectations. Readers are
cautioned not to place any undue reliance on any forward-looking
statements. Forward-looking statements necessarily involve risks and
uncertainties, many of which are outside of our control, that could
cause actual results to differ materially from such statements and from
our historical results and experience. These risks and uncertainties
include such things as: the impact of significant fluctuations and
volatility in various input costs, such as cotton and oil-related
materials, utilities, freight and wages; the failure of businesses we
acquire to perform to expectations; current economic conditions,
including consumer spending levels and the price elasticity of our
products; legal, regulatory, political and economic risks associated
with our operations in international markets, including the risk of
significant fluctuations in foreign exchange rates; the highly
competitive and evolving nature of the industry in which we compete;
unanticipated business disruptions or the loss of one or more suppliers
in our global supply chain; our ability to effectively manage our
inventory and reduce inventory reserves; and other risks identified from
time to time in our most recent Securities and Exchange Commission
reports, including our annual report on Form 10-K and quarterly reports
on Form 10-Q, as well as in the investors section of our corporate
website at www.Hanes.com/investors.
Since it is not possible to predict or identify all of the risks,
uncertainties and other factors that may affect future results, the
above list should not be considered a complete list. Any forward-looking
statement speaks only as of the date on which such statement is made,
and HanesBrands undertakes no obligation to update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise, other than as required by law.
HanesBrands
HanesBrands is a socially responsible leading marketer of everyday basic
apparel under some of the world’s strongest apparel brands, including Hanes,
Champion, Playtex, Bali, Maidenform, Flexees,
JMS/Just My Size, barely there, Wonderbra and Gear
for Sports. The company sells T-shirts, bras, panties, shapewear,
men’s underwear, children’s underwear, socks, hosiery, and activewear
produced in the company’s low-cost global supply chain. Ranked No. 512
on the Fortune 1000 list, Hanes has approximately 49,700 employees in
more than 25 countries and takes pride in its strong reputation for
ethical business practices. Hanes is a U.S. Environmental Protection
Agency Energy Star 2013 and 2012 Sustained Excellence Award winner and
2010 and 2011 Partner of the Year. The company ranks No. 141 on Newsweek
magazine’s list of Top 500 greenest U.S. companies. More information
about the company and its corporate social responsibility initiatives,
including environmental, social compliance and community improvement
achievements, may be found at www.Hanes.com/corporate.
TABLE 1
|
HANESBRANDS INC.
Condensed Consolidated Statements of Income
(Amounts in thousands, except per-share amounts)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
Year Ended
|
|
|
|
December 28, 2013
|
|
December 29, 2012
|
|
% Change
|
|
December 28, 2013
|
|
December 29, 2012
|
|
% Change
|
Net sales
|
$
|
1,285,790
|
|
|
$
|
1,153,256
|
|
|
11.5
|
%
|
|
$
|
4,627,802
|
|
|
$
|
4,525,721
|
|
|
2.3
|
%
|
Cost of sales
|
858,558
|
|
|
755,185
|
|
|
|
|
3,016,109
|
|
|
3,105,674
|
|
|
|
Gross profit
|
427,232
|
|
|
398,071
|
|
|
7.3
|
%
|
|
1,611,693
|
|
|
1,420,047
|
|
|
13.5
|
%
|
As a % of net sales
|
33.2
|
%
|
|
34.5
|
%
|
|
|
|
34.8
|
%
|
|
31.4
|
%
|
|
|
Selling, general and administrative expenses
|
355,534
|
|
|
245,060
|
|
|
|
|
1,096,507
|
|
|
979,932
|
|
|
|
As a % of net sales
|
27.7
|
%
|
|
21.2
|
%
|
|
|
|
23.7
|
%
|
|
21.7
|
%
|
|
|
Operating profit
|
71,698
|
|
|
153,011
|
|
|
(53.1
|
)%
|
|
515,186
|
|
|
440,115
|
|
|
17.1
|
%
|
As a % of net sales
|
5.6
|
%
|
|
13.3
|
%
|
|
|
|
11.1
|
%
|
|
9.7
|
%
|
|
|
Other expenses
|
15,491
|
|
|
35,486
|
|
|
|
|
17,501
|
|
|
40,315
|
|
|
|
Interest expense, net
|
26,038
|
|
|
30,352
|
|
|
|
|
101,884
|
|
|
136,855
|
|
|
|
Income from continuing operations before
income tax expense
|
30,169
|
|
|
87,173
|
|
|
|
|
395,801
|
|
|
262,945
|
|
|
|
Income tax expense (benefit)
|
(2,097
|
)
|
|
8,958
|
|
|
|
|
65,307
|
|
|
30,502
|
|
|
|
Income from continuing operations
|
32,266
|
|
|
78,215
|
|
|
(58.7
|
)%
|
|
330,494
|
|
|
232,443
|
|
|
42.2
|
%
|
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
2,173
|
|
|
|
|
—
|
|
|
(67,762
|
)
|
|
|
Net income
|
$
|
32,266
|
|
|
$
|
80,388
|
|
|
(59.9
|
)%
|
|
$
|
330,494
|
|
|
$
|
164,681
|
|
|
100.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - basic:
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
$
|
0.32
|
|
|
$
|
0.79
|
|
|
(59.5
|
)%
|
|
$
|
3.31
|
|
|
$
|
2.35
|
|
|
40.9
|
%
|
Discontinued operations
|
—
|
|
|
0.02
|
|
|
NM
|
|
—
|
|
|
(0.69
|
)
|
|
NM
|
Net income
|
$
|
0.32
|
|
|
$
|
0.81
|
|
|
(60.5
|
)%
|
|
$
|
3.31
|
|
|
$
|
1.67
|
|
|
98.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - diluted:
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
$
|
0.32
|
|
|
$
|
0.78
|
|
|
(59.0
|
)%
|
|
$
|
3.25
|
|
|
$
|
2.32
|
|
|
40.1
|
%
|
Discontinued operations
|
—
|
|
|
0.02
|
|
|
NM
|
|
—
|
|
|
(0.68
|
)
|
|
NM
|
Net income
|
$
|
0.32
|
|
|
$
|
0.80
|
|
|
(60.0
|
)%
|
|
$
|
3.25
|
|
|
$
|
1.64
|
|
|
98.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
100,159
|
|
|
98,989
|
|
|
|
|
99,859
|
|
|
98,709
|
|
|
|
Diluted
|
101,881
|
|
|
100,885
|
|
|
|
|
101,823
|
|
|
100,269
|
|
|
|
TABLE 2
|
HANESBRANDS INC.
Supplemental Financial Information
(Dollars in thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
Year Ended
|
|
|
|
December 28, 2013
|
|
December 29, 2012
|
|
% Change
|
|
December 28, 2013
|
|
December 29, 2012
|
|
% Change
|
Segment net sales¹:
|
|
|
|
|
|
|
|
|
|
|
|
Innerwear
|
$
|
700,464
|
|
|
$
|
585,750
|
|
|
19.6
|
%
|
|
$
|
2,444,935
|
|
|
$
|
2,334,006
|
|
|
4.8
|
%
|
Activewear
|
340,428
|
|
|
336,991
|
|
|
1.0
|
%
|
|
1,306,936
|
|
|
1,318,012
|
|
|
(0.8
|
)%
|
Direct to Consumer
|
107,360
|
|
|
93,963
|
|
|
14.3
|
%
|
|
380,079
|
|
|
372,359
|
|
|
2.1
|
%
|
International
|
137,538
|
|
|
136,552
|
|
|
0.7
|
%
|
|
495,852
|
|
|
501,344
|
|
|
(1.1
|
)%
|
Total net sales
|
$
|
1,285,790
|
|
|
$
|
1,153,256
|
|
|
11.5
|
%
|
|
$
|
4,627,802
|
|
|
$
|
4,525,721
|
|
|
2.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating profit¹:
|
|
|
|
|
|
|
|
|
|
|
|
Innerwear
|
$
|
125,067
|
|
|
$
|
129,581
|
|
|
(3.5
|
)%
|
|
$
|
467,398
|
|
|
$
|
407,318
|
|
|
14.8
|
%
|
Activewear
|
43,729
|
|
|
40,110
|
|
|
9.0
|
%
|
|
170,749
|
|
|
72,820
|
|
|
134.5
|
%
|
Direct to Consumer
|
9,296
|
|
|
7,109
|
|
|
30.8
|
%
|
|
34,737
|
|
|
25,890
|
|
|
34.2
|
%
|
International
|
11,188
|
|
|
12,188
|
|
|
(8.2
|
)%
|
|
42,850
|
|
|
46,713
|
|
|
(8.3
|
)%
|
General corporate expenses/other
|
(36,792
|
)
|
|
(35,977
|
)
|
|
2.3
|
%
|
|
(119,758
|
)
|
|
(112,626
|
)
|
|
6.3
|
%
|
Acquisition, integration and other action related charges
|
(80,790
|
)
|
|
—
|
|
|
NM
|
|
(80,790
|
)
|
|
—
|
|
|
NM
|
Total operating profit
|
$
|
71,698
|
|
|
$
|
153,011
|
|
|
(53.1
|
)%
|
|
$
|
515,186
|
|
|
$
|
440,115
|
|
|
17.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA²:
|
|
|
|
|
|
|
|
|
|
|
|
Net income from continuing operations
|
$
|
32,266
|
|
|
$
|
78,215
|
|
|
|
|
$
|
330,494
|
|
|
$
|
232,443
|
|
|
|
Interest expense, net
|
26,038
|
|
|
30,352
|
|
|
|
|
101,884
|
|
|
136,855
|
|
|
|
Income tax expense
|
(2,097
|
)
|
|
8,958
|
|
|
|
|
65,307
|
|
|
30,502
|
|
|
|
Depreciation and amortization
|
23,689
|
|
|
22,940
|
|
|
|
|
90,890
|
|
|
92,253
|
|
|
|
Debt prepayment expenses
|
—
|
|
|
33,906
|
|
|
|
|
—
|
|
|
33,906
|
|
|
|
Total Adjusted EBITDA
|
$
|
79,896
|
|
|
$
|
174,371
|
|
|
(54.2
|
)%
|
|
$
|
588,575
|
|
|
$
|
525,959
|
|
|
11.9
|
%
|
¹
|
In the first quarter of 2013, Hanesbrands renamed the Outerwear
segment to Activewear to reflect the trend of this category becoming
a part of consumers’ active lifestyles and more aptly describe the
competitive space of this business. In addition, certain prior-year
segment operating profit disclosures have been revised to conform to
the current-year presentation. These changes were primarily the
result of Hanesbrands’ decision to revise the manner in which
Hanesbrands allocates certain selling, general and administrative
expenses.
|
²
|
Earnings from continuing operations before interest, taxes,
depreciation, amortization and debt prepayment expenses (Adjusted
EBITDA) is a non-GAAP financial measure.
|
TABLE 3
|
HANESBRANDS INC.
Condensed Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)
|
|
|
|
|
|
December 28, 2013
|
|
December 29, 2012
|
Assets
|
|
|
|
Cash and cash equivalents
|
$
|
115,863
|
|
|
$
|
42,796
|
Trade accounts receivable, net
|
578,558
|
|
|
506,278
|
Inventories
|
1,283,331
|
|
|
1,253,136
|
Other current assets
|
265,914
|
|
|
225,315
|
Total current assets
|
2,243,666
|
|
|
2,027,525
|
|
|
|
|
Property, net
|
579,883
|
|
|
596,158
|
Intangible assets and goodwill
|
1,004,143
|
|
|
553,414
|
Other noncurrent assets
|
262,356
|
|
|
454,603
|
Total assets
|
$
|
4,090,048
|
|
|
$
|
3,631,700
|
|
|
|
|
Liabilities
|
|
|
|
Accounts payable and accrued liabilities
|
$
|
781,296
|
|
|
$
|
675,616
|
Notes payable
|
36,192
|
|
|
26,216
|
Accounts Receivable Securitization Facility
|
181,790
|
|
|
173,836
|
Total current liabilities
|
999,278
|
|
|
875,668
|
Long-term debt
|
1,467,000
|
|
|
1,317,500
|
Other noncurrent liabilities
|
393,147
|
|
|
551,666
|
Total liabilities
|
2,859,425
|
|
|
2,744,834
|
|
|
|
|
Equity
|
1,230,623
|
|
|
886,866
|
Total liabilities and equity
|
$
|
4,090,048
|
|
|
$
|
3,631,700
|
TABLE 4
|
HANESBRANDS INC.
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
|
|
|
|
Year Ended
|
|
December 28, 2013
|
|
December 29, 2012
|
Operating Activities:
|
|
|
|
Net income
|
$
|
330,494
|
|
|
$
|
164,681
|
|
Depreciation and amortization
|
90,890
|
|
|
93,036
|
|
Impairment of intangibles
|
—
|
|
|
37,425
|
|
Loss on disposition of business
|
—
|
|
|
32,829
|
|
Other noncash items
|
47,553
|
|
|
(613
|
)
|
Changes in assets and liabilities, net
|
122,344
|
|
|
226,249
|
|
Net cash from operating activities
|
591,281
|
|
|
553,607
|
|
|
|
|
|
Investing Activities:
|
|
|
|
Capital expenditures
|
(37,538
|
)
|
|
(40,570
|
)
|
Acquisition of business
|
(559,855
|
)
|
|
—
|
|
Disposition of business
|
—
|
|
|
12,704
|
|
Net cash from investing activities
|
(597,393
|
)
|
|
(27,866
|
)
|
|
|
|
|
Financing Activities:
|
|
|
|
Cash dividends paid
|
(59,442
|
)
|
|
—
|
|
Net borrowings (repayments) on notes payable, debt and other
|
153,199
|
|
|
(517,777
|
)
|
Net cash from financing activities
|
93,757
|
|
|
(517,777
|
)
|
Effect of changes in foreign currency exchange rates on cash
|
(14,578
|
)
|
|
(513
|
)
|
Increase in cash and cash equivalents
|
73,067
|
|
|
7,451
|
|
Cash and cash equivalents at beginning of year
|
42,796
|
|
|
35,345
|
|
Cash and cash equivalents at end of period
|
$
|
115,863
|
|
|
$
|
42,796
|
|
|
|
|
|
Supplemental cash flow information¹:
|
|
|
|
Net cash from operating activities
|
$
|
591,281
|
|
|
$
|
553,607
|
|
Capital expenditures
|
(37,538
|
)
|
|
(40,570
|
)
|
Free cash flow
|
$
|
553,743
|
|
|
$
|
513,037
|
|
¹
|
Free cash flow is a non-GAAP measure.
|
TABLE 5
|
HANESBRANDS INC.
Supplemental Financial Information
Reconciliation of Select GAAP Measures to Non-GAAP Measures
(Amounts in thousands, except per-share amounts)
(Unaudited)
|
|
|
|
|
|
Quarter Ended
|
|
Year Ended
|
|
December 28, 2013
|
|
December 29, 2012
|
|
December 28, 2013
|
|
December 29, 2012
|
Gross profit, as reported under GAAP
|
$
|
427,232
|
|
|
$
|
398,071
|
|
|
$
|
1,611,693
|
|
|
$
|
1,420,047
|
|
Acquisition, integration and other action related charges
|
16,221
|
|
|
—
|
|
|
16,221
|
|
|
—
|
|
Gross profit, as adjusted
|
$
|
443,453
|
|
|
$
|
398,071
|
|
|
$
|
1,627,914
|
|
|
$
|
1,420,047
|
|
As a % of net sales
|
34.5
|
%
|
|
34.5
|
%
|
|
35.2
|
%
|
|
31.4
|
%
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses, as reported under
GAAP
|
$
|
355,534
|
|
|
$
|
245,060
|
|
|
$
|
1,096,507
|
|
|
$
|
979,932
|
|
Acquisition, integration and other action related charges
|
(64,569
|
)
|
|
—
|
|
|
(64,569
|
)
|
|
—
|
|
Selling, general and administrative expenses, as adjusted
|
$
|
290,965
|
|
|
$
|
245,060
|
|
|
$
|
1,031,938
|
|
|
$
|
979,932
|
|
As a % of net sales
|
22.6
|
%
|
|
21.2
|
%
|
|
22.3
|
%
|
|
21.7
|
%
|
|
|
|
|
|
|
|
|
Operating profit, as reported under GAAP
|
$
|
71,698
|
|
|
$
|
153,011
|
|
|
$
|
515,186
|
|
|
$
|
440,115
|
|
Acquisition, integration and other action related charges included
in gross profit
|
16,221
|
|
|
—
|
|
|
16,221
|
|
|
—
|
|
Acquisition, integration and other action related charges included
in SG&A
|
64,569
|
|
|
—
|
|
|
64,569
|
|
|
—
|
|
Operating profit, as adjusted
|
$
|
152,488
|
|
|
$
|
153,011
|
|
|
$
|
595,976
|
|
|
$
|
440,115
|
|
As a % of net sales
|
11.9
|
%
|
|
13.3
|
%
|
|
12.9
|
%
|
|
9.7
|
%
|
|
|
|
|
|
|
|
|
Income from continuing operations, as reported under GAAP
|
$
|
32,266
|
|
|
$
|
78,215
|
|
|
$
|
330,494
|
|
|
$
|
232,443
|
|
Acquisition, integration and other action related charges included
in gross profit
|
16,221
|
|
|
—
|
|
|
16,221
|
|
|
—
|
|
Acquisition, integration and other action related charges included
in SG&A
|
64,569
|
|
|
—
|
|
|
64,569
|
|
|
—
|
|
Debt prepayment expenses
|
—
|
|
|
33,906
|
|
|
—
|
|
|
33,906
|
|
Tax effect on actions
|
(13,331
|
)
|
|
(3,932
|
)
|
|
(13,331
|
)
|
|
(3,932
|
)
|
Income from continuing operations, as adjusted
|
$
|
99,725
|
|
|
$
|
108,189
|
|
|
$
|
397,953
|
|
|
$
|
262,417
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share from continuing operations, as reported
under GAAP
|
$
|
0.32
|
|
|
$
|
0.78
|
|
|
$
|
3.25
|
|
|
$
|
2.32
|
|
Acquisition, integration and other action related charges
|
0.66
|
|
|
—
|
|
|
0.66
|
|
|
—
|
|
Debt prepayment expenses
|
—
|
|
|
0.30
|
|
|
—
|
|
|
0.30
|
|
Diluted earnings per share from continuing operations, as adjusted
|
$
|
0.98
|
|
|
$
|
1.07
|
|
|
$
|
3.91
|
|
|
$
|
2.62
|
|

Source: HanesBrands
HanesBrands News Media: Matt Hall, 336-519-3386 or Analysts
and Investors: T.C. Robillard, 336-519-2115
|