Russell Corporation reported fiscal 2005 first quarter net sales of $313.2 million, a 24% increase over the comparable period last year. RML reported first quarter earnings of $2.2 million, or 7 cents per diluted share, versus earnings of $531,000, or 2 cents per diluted share, in first quarter 2004.
Sales for the quarter ended April 3, 2005, reflect a 3% increase in the Company's ongoing businesses, in addition to $54 million of incremental sales for acquisitions owned for less than a year. Excluding the impact of the revenue associated with the Major League Baseball contract, which expired in 2004, company-wide organic sales were up 5% over a year ago.
In addition to a strong showing by Brooks, with sales up more than 30% over their 2004 first quarter, sales increases were led by JERZEES, with particular strength in the artwear channel.
“We are pleased that Brooks has made such a significant contribution and exceeded our expectations for the quarter,” said Jack Ward, chairman and CEO. “We also were extremely pleased to have sales growth from our core businesses in addition to our acquisitions,” said Ward. “Organic gains in the quarter were led by JERZEES with activewear sales increases in the artwear channel in the mid teens. JERZEES also experienced nearly double digit growth in mass retail.”
Gross profit was $85.9 million, or a 27.4% gross margin, for the 2005 first quarter versus a gross profit of $64.6 million, or a 25.7% gross margin, in the prior year. Lower manufacturing costs and contributions from acquisitions positively impacted gross profit during the quarter.
Selling, general and administrative expenses (“SG&A”) for the 2005 first quarter were $73.5 million, or 23.5% of net sales, versus last year's $56.5 million, or 22.4% of net sales in the comparable period last year. SG&A increased primarily due to the higher relative SG&A expenses associated with recent acquisitions. The first quarter of 2005 includes approximately $.02 cents per share in extra expenses associated with the compliance and testing of Sarbanes-Oxley 404.
“With our solid start to the year, we are reaffirming our 2005 fiscal year guidance for sales and earnings. We continue to expect sales to be in the range of $1.50 billion to $1.52 billion versus $1.298 billion last year,” said Ward. “Additionally, we are reaffirming our quarterly ongoing earnings guidance issued earlier this year.”
“We continue to see positive results from our expansion in all three categories of the sporting goods business: sports apparel, sporting goods equipment and performance footwear,” added Ward.
“As we continue to develop new opportunities and expand programs within our core brands, we believe our strategy to maximize our presence in the sporting goods industry will drive continued sales and earnings increases beyond 2005. Our current sales outlook remains positive due to these efforts, and we are confident that expected synergies from our acquisitions will lead to improved levels of profitability longer term,” Ward added.
RUSSELL CORPORATION Consolidated Statements of Income (Amounts in Thousands Except Share and Per Share Amounts) 13 Weeks 13 Weeks Ended Ended 4/03/05 4/04/04 Net sales $313,242 $251,793 Cost of goods sold 227,351 187,160 Gross profit 85,891 64,633 Selling, general and administrative expenses 73,517 56,478 Other (income) expense - net (546) 138 Operating income 12,920 8,017 Interest expense, net 8,889 7,187 Non-controlling interests 674 -- Income before income taxes 3,357 830 Provision for income taxes 1,175 299 Net income $2,182 $531 Net income per common share: Basic $0.07 $0.02 Diluted $0.07 $0.02