02/15/24
8:30 am EST
Most Recent
Press Release
HanesBrands Announces Preliminary Third-Quarter 2017 Results, Sets Date for Quarterly Investor Call, and Acquires Alternative Apparel
HanesBrands Announces Preliminary Third-Quarter 2017 Results, Sets Date for Quarterly Investor Call, and Acquires Alternative Apparel
October 18, 2017 at 8:57 AM EDT
-
Company Expects Third-Quarter 2017 Net Sales of Approximately
$1.80 Billion , GAAP EPS of Approximately$0.55 , and Adjusted EPS of Approximately$0.60 - Company Acquires Alternative Apparel, a U.S.-Based Marketer of “Better Basics”
The company expects to report third-quarter net sales of approximately
Hanes will update its full-year guidance and release full third-quarter
results after the market closes on Wednesday, Nov.1. The company’s
third-quarter investor conference call will begin at
“We met our goal of returning to organic growth, and we continued to
generate strong operating cash flow,” said Hanes Chief Executive Officer
Alternative Apparel
Hanes has purchased privately held Alternative Apparel in an all-cash
transaction valued at approximately
The post-synergy purchase price multiple is expected to be approximately
3.5 times projected EBITDA. Hanes funded the acquisition with cash on
hand and short-term borrowings on its revolving credit facility. The
acquisition closed
Alternative Apparel, founded in 1995, sells Alternative brand better basic T-shirts, fleece and other tops and bottoms. Alternative is a lifestyle brand known for its comfort, style and social responsibility.
The company’s sales and growth are split between the embellishment
channel and the retail, online and direct-to-consumer channels. The
company operates three Alternative stores – in
“This is an exciting acquisition that supports our activewear growth strategy,” Evans said. “We will be able to leverage our global low-cost supply chain, which is a recognized social, environmental and ethical leader, with another strong brand to expand our market and channel penetration, including online. Combining these two companies is a great way to create value and generate growth opportunities.”
Alternative Apparel outsources production of all of its products, while Hanes self-manufactures the majority of its activewear basics.
“Alternative Apparel has an attractive business model, a very strong and differentiated brand, and a highly talented team of employees,” Evans said. “Adding the Alternative brand and product lineup further diversifies our sales mix as we emphasize growth across all channels, including online.”
Alternative Apparel CEO
“We’re thrilled to share Alternative products and experiences on a grander scale by leveraging Hanes’ global supply chain and growth platform,” Toporek said. “Partnering with a like-minded company that is a longtime industry innovator and leader will benefit our employees, our customers, and our brand as a whole.”
In the past six years, Hanes has expanded its Champion and
Hanes activewear graphic and sports apparel business through the
acquisitions of Gear for Sports, the leading seller of licensed logo
apparel in the collegiate bookstore channel; Knights Apparel, a leading
seller of licensed logo apparel in the mass retail channel; and GTM
Sportswear, a leading seller of custom decorated high school teamwear
and fanwear. The company has also launched
Third-Quarter Investor Conference Call
At the close of regular trading
The company will hold its quarterly investor conference call at
Replays of the conference call will be available via the Internet and
telephone. An archived replay of the audio webcast will be available in
the investors section of the Hanes corporate website. The telephone
playback will be available from
Note on Adjusted Measures and Reconciliation to GAAP Measures
To supplement financial guidance prepared in accordance with generally accepted accounting principles, Hanes provides quarterly and full-year results and guidance concerning certain non‐GAAP financial measures.
Adjusted EPS is defined as diluted EPS excluding actions and the tax effect on actions. Actions during the third quarter of 2017 were adjustments for acquisition-related integration costs. Acquisition-related integration costs include adjustments directly related to the integration of completed acquisitions. These costs include legal fees, consulting fees, severance costs, certain purchase accounting items, facility closures, inventory write-offs, information technology integration costs, and similar charges. While these costs are not operational in nature and are not expected to continue for any singular transaction on an ongoing basis, similar types of costs, expenses and charges have occurred in prior periods and may recur in the future as the company continues to integrate prior acquisitions and pursues any future acquisitions. Hanes has chosen to present non‐GAAP measures excluding the effects of these actions to investors to enable additional analyses of past, present and future operating performance and as a supplemental means of evaluating operations absent the effect of acquisition‐related expenses and other actions. Hanes believes these non-GAAP measures provide management and investors with valuable supplemental information for analyzing the operating performance of the company’s ongoing business without giving effect to costs or foreign currency gains associated with the execution and integration of any of the aforementioned actions taken.
In the third quarter of 2017, Hanes expects to incur approximately
EBITDA is a non-GAAP measure defined as earnings before interest, taxes, depreciation and amortization. The company has chosen to present an estimated post-synergy EBITDA multiple related to the purchase price of Alternative Apparel.
Hanes considers EBITDA to be an important measure used for supplemental evaluation of operating performance and acquisition multiples.
Hanes believes that EBITDA is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the industry, and management uses EBITDA for planning purposes in connection with setting its capital allocation strategy. EBITDA should not, however, be considered as a measure of discretionary cash available to invest in the growth of the business.
Organic sales is a non-GAAP metric. Hanes’ definition for organic sales in 2017, as previously communicated, is first-half sales excluding contributions from 2016 acquisitions and second-half sales excluding minimal acquisition contributions in the third quarter.
Non‐GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as an alternative to, or substitute for, financial results prepared in accordance with GAAP. Further, the non-GAAP measures presented may be different from non-GAAP measures with similar or identical names presented by other companies.
Cautionary Statement Concerning Forward-Looking Statements
This press release contains certain forward-looking statements,
as defined under U.S. federal securities laws, including, among others,
those regarding preliminary quarterly results as well as the benefits
anticipated from the acquisition of Alternative Apparel. 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 highly
competitive and evolving nature of the industry in which we compete; any
inadequacy, interruption, integration failure or security failure with
respect to our information technology; significant fluctuations in
foreign exchange rates; the rapidly changing retail environment; our
complex multinational tax structure; our ability to properly manage
strategic projects; our ability to attract and retain a senior
management team with the core competencies needed to support our growth
in global markets; risks related to our international operations,
including the impact to our business as a result of the United Kingdom’s
recent referendum to leave the
View source version on businesswire.com: http://www.businesswire.com/news/home/20171018005841/en/
Source:
HanesBrands
News Media:
Matt Hall, 336-519-3386
or
Analysts
and Investors:
TC Robillard, 336-519-2115
Data Provided by Refinitiv. Minimum 15 minutes delayed.