Company Also Announces Preliminary Financial Results for the First Quarter 2013 and Reaffirms 2013 Guidance in Advance of Investor Meeting Webcast Today
HanesBrands (NYSE: HBI), a leading marketer of everyday branded basic
apparel, today announced that its Board of Directors has initiated a
quarterly dividend as part of the company’s cash deployment strategy to
drive additional shareholder value.
The Board authorized the regular quarterly dividend of $0.20 per share
to be paid June 3, 2013, for stockholders of record at the close of
business on May 20, 2013. The quarterly dividend is the first for Hanes
since its spinoff as an independent public company in 2006.
“Initiating a quarterly dividend is a substantial company milestone made
possible by strong strategic execution, successful debt reduction and
cash-flow generation, and margin-improvement prospects,” Hanes Chairman
and Chief Executive Officer Richard A. Noll said. “With our successful
track record and long-term outlook, the Board decided it was time to
institute a regular quarterly dividend.”
In conjunction with the dividend authorization disclosure and in advance
of today’s previously scheduled investor meeting, the company decided to
announce preliminary financial results for the first quarter ended March
30, 2013, and reaffirm full-year guidance for net sales, operating
profit, earnings per diluted share and free cash flow.
The company expects to report first-quarter net sales of approximately
$945 million; operating profit of $82 million to $85 million; and EPS of
$0.48 to $0.51. Hanes will release final first-quarter financial results
at the close of trading on the New York Stock Exchange Tuesday, April
23, 2013.
Net sales for the first quarter were hampered by a sluggish retail
environment as a result of delayed income tax returns and inclement
weather compared with an early spring a year ago. However, the quarter’s
operating profit margin will expand significantly, benefitting from the
company’s Innovate-to-Elevate margin-enhancement initiatives built on
strong brands, a low-cost supply chain, and innovation platforms.
For the full year, Hanes reaffirmed all of its 2013 guidance issued Feb.
5, 2013, including expectations for net sales of approximately $4.6
billion; operating profit of $500 million to $550 million; EPS of $3.25
to $3.40; and free cash flow of approximately $350 million to $450
million.
Investor Meeting Webcast Information
Later today, Hanes will provide a live webcast of its previously planned
investor meeting to review business strategies and goals for registered
participants in Las Vegas. The live Internet broadcast, which will
include audio and slides, will begin at 3 p.m. PDT (6 p.m. EDT) and is
expected to last up to approximately one hour. The live webcast and an
archived replay may be accessed from the home page or the investors
section of the HanesBrands corporate website, www.HanesBrands.com.
Note on Non-GAAP Terms and Definitions
Free cash flow is not a generally accepted accounting principle (GAAP)
measure. Free cash flow is defined as net cash from operating activities
less net capital expenditures. Free cash flow may not be representative
of the amount of residual cash flow that is available to the company for
discretionary expenditures since it may not include deductions for
mandatory debt-service requirements and other nondiscretionary
expenditures. The company believes, however, that free cash flow is a
useful measure of the cash-generating ability of the business relative
to capital expenditures and financial performance.
For 2013 guidance, net cash provided by operating activities is expected
to be approximately $400 million to $500 million and net capital
expenditures are expected to be approximately $50 million, resulting in
expectations for non-GAAP free cash flow of approximately $350 million
to $450 million.
Cautionary Statement Concerning Forward-Looking Statements
Statements in this press release that are not statements of historical
fact are forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934, including those regarding preliminary quarterly results as
well as guidance as to future performance. These and other
forward-looking statements are made only as of the date of this press
release and are based on our current intent, beliefs, plans and
expectations. They involve risks and uncertainties that could cause
actual future results, performance or developments to differ materially
from those described in or implied by such forward-looking statements.
These risks and uncertainties include the following: current economic
conditions, including consumer spending levels and the price elasticity
of our products; the impact of significant fluctuations and volatility
in various input costs, such as cotton and oil-related materials,
utilities, freight and wages; the highly competitive and evolving nature
of the industry in which we compete; financial difficulties experienced
by, or loss of or reduction in sales to, any of our top customers or
groups of customers; our ability to successfully manage social,
political, economic, legal and other conditions affecting our domestic
and foreign operations and supply-chain sources, such as political
instability and acts of war or terrorism, natural disasters, disruption
of markets, operational disruptions, changes in import and export laws,
currency restrictions and currency exchange rate fluctuations; the
impact of the loss of one or more of our suppliers of finished goods or
raw materials; our ability to effectively manage our inventory and
reduce inventory reserves; our ability to optimize our global supply
chain; our ability to continue to effectively distribute our products
through our distribution network; the risk of significant fluctuations
in foreign currency exchange rates; the impact of customers requiring
products on an exclusive basis or other forms of economic support; our
ability to accurately forecast demand for our products; increasing
pressure on margins; our ability to keep pace with changing consumer
preferences; the impact of any inadequacy, interruption or failure with
respect to our information technology or any data security breach; our
ability to protect our reputation and brand images; our ability to
protect our trademarks, copyrights and patents; risks associated with
our indebtedness, such as our debt service requirements, the financial
ratios our debt instruments require us to maintain and restrictions on
our operating and financial flexibility; market returns on the plan
assets of our pension plans; the impact of a significant decline in the
fair value of the intangible assets and goodwill on our balance sheet;
unanticipated changes in our tax rates or exposure to additional income
tax liabilities or a change in our ability to realize deferred tax
benefits; our ability to comply with environmental and other laws and
regulations; legal, regulatory, political and economic risks associated
with our operations in international markets; costs and adverse
publicity from violations of labor or environmental laws by us or our
suppliers; our ability to attract and retain key personnel; our ability
to integrate and grow acquisitions successfully; anti-takeover
provisions our charter and bylaws, as well as Maryland law and our
stockholder rights agreement; and other risks identified from time to
time in our most recent Securities and Exchange Commission reports,
including our annual report on Form 10-K, quarterly reports on Form 10-Q
and current reports on Form 8-K, registration statements, press releases
and other communications, as well as in the investors section of our
corporate website at http://tiny.cc/HanesBrandsIR.
Except as required by law, the company undertakes no obligation to
update or revise forward-looking statements to reflect changed
assumptions, the occurrence of unanticipated events or changes to future
operating results over time.
HanesBrands
HanesBrands is a socially responsible leading marketer of everyday basic
apparel under some of the world’s strongest apparel brands, including Hanes,
Champion, Playtex, Bali, JMS/Just My Size, barely
there, Wonderbra and Gear for Sports. The company
sells T-shirts, bras, panties, men’s underwear, children’s underwear,
socks, hosiery, casualwear and activewear produced in the company’s
low-cost global supply chain. Ranked No. 512 on the Fortune 1000 list,
Hanes has approximately 51,500 employees in more than 25 countries and
takes pride in its strong reputation for ethical business practices.
Hanes is a U.S. Environmental Protection Agency Energy Star 2013 and
2012 Sustained Excellence Award winner and 2010 and 2011 Partner of the
Year. The company ranks No. 141 on Newsweek magazine’s list of Top 500
greenest U.S. companies. More information about the company and its
corporate social responsibility initiatives, including environmental,
social compliance and community improvement achievements, may be found
on the Hanes corporate website at www.hanesbrands.com.
