Russell Corporation fiscal 2005 fourth quarter sales were $354.6 million, an increase of 6.2% over the $334.0 million reported in the same period a year ago. The Company reported earnings of $11.8 million, or 36 cents per diluted share, versus 31 cents per diluted share reported in the fourth quarter of 2004. Net income in the fourth quarter of 2005 was impacted by a tax benefit in the quarter.

Sales for the quarter ended December 31, 2005 included $27 million in incremental sales from Brooks, the only acquisition owned for less than a year. Beyond Brooks, sales gains were strongest in the Artwear business, which experienced growth in the quarter in the mid-teens.

Gross profit for the fourth quarter of 2005 was $99.9 million, or a 28.2% gross margin as a percent of sales, versus a gross profit of $97.1 million, or a 29.1% gross margin, in the prior year. The positive impact of increased unit volumes in Artwear and higher margins associated with Brooks was generally offset by a shift in product mix and increased year-over-year costs for polyester, transportation and energy. Losses at Huffy Sports also negatively affected results.

For the 2005 fourth quarter, selling, general and administrative expenses (“SG&A”) were up $6.2 million to $79.9 million. Excluding the SG&A associated with Brooks, these expenses were lower than a year ago. For the quarter, the Company reported operating income of $19.5 million, versus $24.9 million in the same quarter last year.

During the quarter, the Company recognized the majority of its profits in lower tax countries. The Company benefited from significantly improved profitability in its RLA Manufacturing subsidiary, responsible for the management of Russell's Latin American manufacturing operations. Additionally, Spalding experienced a greater proportion of its profits outside the U.S. through its international licensing subsidiary, based in Ireland. With a greater proportion of profits in these areas, the effective tax rate was significantly reduced in the quarter versus prior year. The Company also benefited from a one-time resolution of certain tax matters relating to previous years.

For the full year ended December 31, 2005, net sales increased $136.4 million to $1.435 billion, a 10.5% increase over the prior year's sales of $1.298 billion. Excluding the sales from acquisitions owned for less than a year, sales were $1.271 billion.

“As indicated earlier, we were disappointed in our 2005 financial results. Despite certain areas of our business having record performances, such as international apparel and Brooks, we did experience disappointing sales overall in our Sporting Goods segment. Unfilled orders earlier in the year contributed to weaker sales results for the balance of the year for Russell Athletic. Additionally, sales weakness in Mossy Oak continued throughout the year, with declines of approximately 20 percent from 2004,” said Jack Ward, chairman and chief executive officer.

Gross profit was $393.6 million, or a 27.4% gross margin as a percent of sales, for fiscal 2005 versus a gross profit of $363.9 million, or a 28.0% gross margin, in the prior year. SG&A expenses for fiscal 2005 were $311.1 million, or 21.7% of net sales, versus $270.3 million, or 20.8% of net sales, in fiscal 2004. Excluding the acquisitions owned for less than a year, SG&A was 21.0% of sales in 2005.

Operating income in 2005 was $84.4 million versus $100.8 million last year. With the impact of the tax benefit in the fourth quarter, the effective rate for the year was approximately 21%, yielding net income for fiscal 2005 of $34.4 million, or $1.03 per share on a fully diluted basis. Net income for 2004 was $47.9 million, or $1.46 per diluted share.

“We feel positive about our many growth opportunities and our cost reduction initiatives outlined in January. We also have already begun to see the benefits from our lean manufacturing initiatives and have experienced a broad base of support for these efforts throughout our operations,” said Ward. “Russell's brands remain solidly positioned with our customers, and we continue to build on our reputation for quality, authenticity and performance, particularly with our primary brands, Spalding, Russell Athletic, Jerzees and Brooks.”

The Company reaffirmed its previous annual guidance for 2006. Russell expects sales for fiscal 2006 to be in the $1.450 to $1.480 billion range. As previously announced, Russell expects GAAP earnings per fully diluted share of $0.32 to $0.59, as charges associated with the previously announced restructuring are estimated to be in the $0.66 to $0.78 range for 2006. Excluding those charges, ongoing earnings are expected to be in the $1.10 to $1.25 range.

Additionally, the Company expects to record an effective tax rate for 2006 of 30% or less.

The Company reported that it expects to report a loss in the first quarter of 2006 in the range of $0.29 to $0.41, as approximately half of the expected 2006 restructuring charges are scheduled to impact the first quarter. Ongoing earnings are expected to be in a range from ($0.02) to $0.04 per share for the quarter reflecting the Company's planned shift to the FIFO (First In First Out) method for accounting for inventory.

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

                                  Quarter-to-Date           Year-to-Date
                                13 Weeks    13 Weeks    52 Weeks    52 Weeks
                                 Ended       Ended       Ended       Ended
                              December 31, January 1,  December 31, January 1,
                                  2005        2005        2005        2005
                              (Unaudited) (Unaudited) (Unaudited)     (1)

    Net sales                   $354,631    $334,032  $1,434,605  $1,298,252
    Cost of goods sold           254,771     236,933   1,041,037     934,372
       Gross profit               99,860      97,099     393,568     363,880

    Selling, general and
       administrative expenses    79,866      73,695     311,070     270,305
    Other (income) expense - net     479      (1,476)     (1,874)     (7,216)
       Operating income           19,515      24,880      84,372     100,791

    Interest expense, net          9,817       7,680      39,153      30,843
    Non-controlling interests        255       1,081       1,820       2,021

       Income before income taxes  9,443      16,119      43,399      67,927

    Provision (benefit) for
     income taxes                 (2,382)      5,815       8,969      19,991

       Net income                $11,825     $10,304     $34,430     $47,936

    Weighted-average common
     shares outstanding:
       Basic                  32,237,863  32,750,260  33,057,179  32,668,376
       Diluted                33,239,330  33,000,155  33,293,900  32,897,559

    Net income per common share:
       Basic                       $0.37       $0.31       $1.04       $1.47
       Diluted                     $0.36       $0.31       $1.03       $1.46

    (1) Derived from the audited financial statements as of January 1, 2005