Russell Corporation announced fiscal 2002 fourth quarter results of $.45 per share, which exceeded the First Call consensus estimate of $.43 per share for the quarter.

“We are pleased to have exceeded analysts EPS expectations for the fourth quarter, especially in this challenging economic environment,” said Jack Ward, chairman and chief executive officer. “Our ongoing gross margin for the quarter improved to 29.9% from 26.4% due to continued sourcing and manufacturing improvements, as well as increased volumes and a better product mix. We also reduced our year-end inventory levels 14.9% to $306.7 million from last year’s level of $360.3 million. In addition, our total debt less cash at year-end was $208.6 million, which is a reduction of $141.9 million, or 40.5%, from the prior year level of $350.5 million and the lowest net debt level in over 10 years.”

Net sales for the 2002 fourth quarter were $308.4 million, a decrease of $6.4 million, or 2.0%, from last year’s fourth quarter sales of $314.8 million. However, after excluding sales from businesses that were acquired or discontinued during the last 12 months, net sales on an ongoing basis increased 1% over last year’s fourth quarter performance. This increase in sales from ongoing businesses was primarily driven by new and expanded fall programs such as a national expansion of men’s and boys fleece at JCPenney, a national men’s fleece program at Sam’s Club, and the introduction of Discus(R) branded products at Sears. This increase was partially offset by price reductions, primarily in the Artwear/Careerwear channel.

EBITDA, defined as net income before interest, taxes, depreciation and amortization, for the 2002 fourth quarter was $42.5 million versus a loss of $26.1 million in the comparable period last year. Excluding 2001 restructuring charges, EBITDA in the 2001 fourth quarter was $35.0 million and included a bad debt reserve of $6.2 million (pre-tax) to provide for potential losses on pre-petition accounts receivable from Kmart. Exclusive of this charge and the restructuring charges, our EBITDA would have been $41.2 million in the 2001 fourth quarter.

Net income for the 2002 fourth quarter was $14.5 million, or $.45 per share, versus a net loss of $30.8 million, or ($.96) per share, in the comparable period last year. Excluding the 2001 restructuring charges, net income in the 2002 fourth quarter was up 49.4% to $14.5 million, or $.45 per share, from $9.7 million, or $.30 per share, in the 2001 fourth quarter. Exclusive of the charge in the 2001 fourth quarter related to the bad debt reserve for Kmart and the restructuring charges, net income would have been $13.5 million, or $.42 per share, in the 2001 fourth quarter.

In fiscal 2002, net sales increased $3.4 million, or 0.3%, to $1.164 billion versus $1.161 billion in fiscal 2001. Excluding sales from businesses that were acquired or discontinued, 2002 net sales on an ongoing basis increased 2% over ongoing net sales for fiscal 2001. For fiscal 2002, net income was $34.3 million, or $1.06 per share, versus a net loss of $55.5 million, or ($1.74) per share, in fiscal 2001.

Excluding the $12.6 million extraordinary charge associated with the early retirement of debt in the 2002 second quarter and the 2001 restructuring charges of $91.9 million (net of tax), net income for fiscal 2002 was $46.9 million, or $1.45 per share, versus $36.5 million, or $1.13 per share, in fiscal 2001. Excluding the extraordinary charge associated with the early retirement of debt in the 2002 second quarter, charges to our bad debt reserves for Kmart, and the 2001 restructuring charges, our earnings would have been $1.55 per share, a 24.0% increase over fiscal 2001.

With the significant declines in the securities markets over the past three years, the value of our pension plan assets has decreased. Accordingly, we recognized an additional pension liability in the 2002 year-end balance sheet that resulted in a non-cash charge to Shareholders Equity of approximately $17.9 million after-tax. This non-cash charge does not impact the Company’s operating results or liquidity in 2002, but will impact our pension costs and funding in the future.

“We are continuing to take a conservative approach to our businesses given the current environment and its potential impact on consumer spending,” said Ward. “For the 2003 first quarter, we are forecasting earnings of $.07 to $.11 per share. For the full 2003 fiscal year, we are forecasting sales to increase 4% to 6% over 2002 levels. EBITDA is expected to be in the range of $160 to $175 million and earnings of $1.60 to $1.75 per share, which includes a $.07 to $.08 per share impact from the changes in accounting for stock compensation and revised pension plan assumptions.”

Russell Corporation has made the decision to adopt FASB 123 and expense stock options and awards on a go-forward basis. As a result, management estimates the financial impact from the adoption of this accounting methodology will be $.03 to $.04 per share in 2003. In addition, the Company has changed the investment assumptions for its pension plan assets, which we expect will further impact profitability in 2003 by approximately $.04 per share.

“I am also pleased to announce that we completed the acquisition of the Bike Athletic business, which compliments Russell Athletic’s position as an authentic athletic brand,” said Ward. “Bike Athletic enhances our position in the team uniform business while placing us in new categories, such as men’s performance underwear and protective gear.” Bike had sales of approximately $35 million in 2002 and $51 million in 2001.

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

                                 14 Weeks    13 Weeks    53 Weeks    52 Weeks
                                  Ended       Ended       Ended       Ended
                                01/04/2003  12/29/2001  01/04/2003  12/29/2001
                               (Unaudited) (Unaudited) (Unaudited)  (Audited)
    Net sales                    $308,445    $314,772  $1,164,328  $1,160,925
    Costs and expenses:
      Cost of goods sold          216,342     255,025     825,763     894,018
      Selling, general and
          administrative
           expenses                61,326      62,206     235,810     226,458
      Interest expense              7,439       8,291      30,246      32,324
      Other (income) expense,
       net                            317      35,312      (2,216)     94,718
                                  285,424     360,834   1,089,603   1,247,518

    Income (loss) before
     income taxes                  23,021     (46,062)     74,725     (86,593)

    Provision (benefit) for
     income taxes                   8,564     (15,306)     27,798     (31,107)

       Income (loss) before
        extraordinary item         14,457     (30,756)     46,927     (55,486)

      Extraordinary charge for
       early retirement of
       debt, net of tax
       benefit of $7,476              ---         ---     (12,621)        ---

       Net income (loss)          $14,457    $(30,756)    $34,306    $(55,486)