Russell Corp. Organic Sales Up 3%; Earnings Up 52%

Russell Corporation reported fiscal 2004 second quarter earnings of $10.2 million, or 31 cents per diluted share, which includes the previously announced 8 1/2 cents per share one-time gain on the sale of a minority interest in Marmot Mountain, Ltd. On an ongoing basis, 2004 second quarter earnings were $7.4 million ($.22 per diluted share), at the top end of the previous projection and up 10% from earnings of $6.7 million ($.20 per diluted share) in the second quarter of 2003.

The Company also reported second quarter net sales of $289.8 million, an 8% increase over the comparable period last year. Incremental sales from acquisitions accounted for $12.9 million of the increase versus prior year, with a 3% increase in the Company's ongoing businesses. Solid gains in the Athletic Group were led by double-digit ongoing increases at Spalding and Mossy Oak.

Gross profit was $80.3 million, or a 27.7% gross margin, for the 2004 second quarter versus a gross profit of $77.4 million, or a 28.9% gross margin in the prior year. During the 2004 second quarter, gross profit was positively impacted by sales and production increases, favorable cost reductions and improved efficiencies. These benefits were offset by continued pricing pressure in Activewear and higher year-over-year fiber and other costs.

Selling, general and administrative expenses (“SG&A”) for the 2004 second quarter were $61.5 million, or 21.2% of net sales, versus $58.5 million, or 21.8% of net sales in the comparable period last year.

“We are very pleased with our acquisitions of American Athletic, Inc. (“AAI”) and Huffy Sports, which will be a part of our Spalding organization. These acquisitions solidify Russell's position as a leading branded athletic and sporting goods company and will result in Russell being the largest basketball equipment company in the world,” said Jack Ward, chairman and CEO. He added, “We believe the combination of AAI, Huffy Sports and Spalding will present significant opportunities for synergies in building sales and reducing costs.”

Ward continued, “With expectations for second half sales growth from existing businesses in the 6-8% range, and including these latest acquisitions, we are increasing our 2004 fiscal year sales forecast to be in the range of $1.30 billion to $1.33 billion versus $1.186 billion in 2003.”

“The fall expansion of Russell Athletic Dri-POWER(R) and introduction of Sweatless Sweats(TM), Spalding's continued strong sell-through, and Mossy Oak's new APX(TM) and Elements(TM) introductions, contribute to our sales expectations for the second half of the year,” Ward added. “Additionally, in Activewear, we anticipate significant revenue resulting from new and incremental fall business with Target and Dollar General. We also expect further increases in Artwear as we continue to expand distribution and build market share.”

Based on the strong second quarter results, the Company is raising the lower end of the forecasted range of earnings per diluted share for fiscal 2004. Revised expectations of EPS for the fiscal year 2004 are $1.45 to $1.60.

For the remainder of 2004, Russell expects third quarter diluted EPS between $.70 and $.78 which includes expenses of $.03 to $.05 from the Huffy Sports acquisition and/or special projects and activities.

Fourth quarter diluted EPS is seen between $.42 and $.49 which includes expenses of $.03 to $.05 from the Huffy Sports acquisition and/or special projects and activities.

                          
                             RUSSELL CORPORATION
                      Consolidated Statements of Income
          (Dollars in Thousands Except Share and Per Share Amounts)

                               13 Weeks    13 Weeks    26 Weeks    26 Weeks
                                Ended       Ended       Ended       Ended
                                7/4/04      7/6/03      7/4/04      7/6/03
                             (Unaudited) (Unaudited) (Unaudited) (Unaudited)
  Net sales                    $289,771    $267,925    $541,564    $495,908
  Cost of goods sold            209,426     190,539     396,586     355,700
     Gross profit                80,345      77,386     144,978     140,208

  Selling, general and
     administrative expenses     61,499      58,499     117,791     107,877
  Other (income) expense - net   (5,060)        704      (4,736)      1,419
     Operating income            23,906      18,183      31,923      30,912

  Interest expense                7,754       7,443      14,941      14,610
  Non-controlling interest          274          --         274          --

     Income before income
      taxes                      15,878      10,740      16,708      16,302

  Provision for income taxes      5,716       4,081       6,015       6,195

      Net income                $10,162      $6,659     $10,693     $10,107

  Net income per common share:
     Basic                        $0.31       $0.21       $0.33       $0.31
     Diluted                      $0.31       $0.20       $0.33       $0.31


                            RUSSELL CORPORATION
                        Unaudited Financial Highlights
                            (Dollars in Thousands)

                                     13 Weeks  13 Weeks  26 Weeks  26 Weeks
                                      Ended     Ended     Ended     Ended
                                      7/4/04    7/6/03    7/4/04    7/6/03

  Domestic Segment
     Brand Groupings:
        Athletic                     $117,410   $97,490  $231,056  $185,680
        Activewear                    139,543   143,595   247,664   260,140
                                      256,953   241,085   478,720   445,820
  International Segment                32,818    26,840    62,844    50,088
  Consolidated Total                 $289,771  $267,925  $541,564  $495,908