Russell (RML) 8-K Russell Reports Second Quarter Sales and Earnings

Exhibit 99.1

For Immediate Release: Contact:     Roger Holliday (Financial)
(678) 742-8181
Nancy Young (Media)
(678) 742-8118

RUSSELL REPORTS SECOND QUARTER SALES AND EARNINGS

Acquisition-led sales increases result in record second quarter sales;

Outlook updated for the balance of the year

ATLANTA, GA (July 28, 2005) – Russell Corporation (NYSE: RML) today reported fiscal 2005 second quarter earnings of $4.7 million or $.14 per diluted share on sales of $342.1 million, record sales for any second quarter.

The 18 percent gain in sales over last year’s second quarter was led by increases associated with acquisitions, which generated more than $50 million in revenues. Excluding the incremental revenue related to acquisitions, the Company experienced a slight increase in sales for the quarter.

Operating income was $18.0 million in the quarter, down from last year’s $23.9 million which included the one-time gain of $4.4 million associated with the sale of the Company’s position in Marmot Mountain, Ltd.

Sales in the Activewear segment increased more than 10 percent and were particularly strong in the Artwear channel, which recorded sales increases of nearly 15 percent for the quarter. Increased product demand led to significant cost increases associated with ramping up production quickly and reacting to changes in style mix, negatively impacting second quarter profits. Further impacting earnings, Activewear did not achieve all of its cost savings goals.

For the Sporting Goods segment, sales increases of nearly 30 percent were driven by the 2004 acquisitions of AAI, Huffy Sports and Brooks. Overall, these acquisitions were on plan, and, as expected, had no material impact on EPS in the quarter. Excluding these acquisitions, revenue in the Sporting Goods segment declined 12 percent in the quarter.

Mossy Oak experienced declines in revenue and profits for the quarter versus a year ago. Lower prices and the reduction of a major retail program resulted in a revenue decline of more than 30 percent in the quarter. Even though most of Mossy Oak’s sales are planned for the second half, the negative impact to profits is not expected to be offset for the balance of the year.

Also in the Sporting Goods segment, increases in sales in the quarter for the Russell Athletic Group’s base business only partially offset the absence of Major League Baseball and the discontinuance of the Discus brand at a major account.

“Given the expectations we had for the quarter, we are certainly disappointed with the results,” said Jack Ward, chairman and CEO. “The good news is that there is solid consumer demand for our products and the major impacts experienced in the second quarter were primarily operational issues. We are rapidly addressing these issues, but we expect continued impact into the third quarter. We have already taken a number of steps to improve our cost position and further leverage our growth opportunities.”

“Our strategy, to maximize our presence in the sporting goods industry by developing new business and expanding programs within our core brands, continues to be successful with our customers,” Ward added. “An example is the integration of Spalding, AAI and Huffy Sports into the Spalding Group, the world’s largest provider of basketball equipment. We are achieving both operational and sales synergies with a number of accounts beginning to introduce new Spalding products into their markets. We believe we can leverage the strength we have in basketballs with the product offerings from these integrated businesses to create a strong foundation and increased sales, particularly with the turn-around at Huffy Sports.”

As demand has remained strong, Russell continues to anticipate that the Activewear segment will achieve strong sales and profit growth for the year, especially for the Company’s market-leading men’s fleece business.

“In the Sporting Goods segment, Brooks is having a strong year with continued sales gains planned for the second half as well,” Ward added. “With ongoing improvements that are being made through the Spalding integration of Huffy Sports and AAI, we expect to continue building momentum into 2006.” Russell Athletic also anticipates sales increases in the second half, based on the reception of new styles and expanded floor space at retail.

Ward continued, “With expectations for second half sales growth from existing businesses in the 4 to 6 percent range, we are maintaining our 2005 fiscal year sales forecast in the range of $1.500 billion to $1.520 billion versus $1.298 billion in 2004.”

Based on the second quarter results, the Company is revising the forecasted range of earnings per diluted share for fiscal 2005. Excluding the 2004 one-time gain associated with the sale of the position in Marmot Mountain, Ltd., in 2004, revised expectations now include an increase in operating profits of 17 to 19 percent for the year. Fully diluted earnings per share on an ongoing basis are now forecast to be in the $1.40 to $1.48 range. In addition, the Company may take certain actions to improve organizational effectiveness and reduce administrative costs which could result in special charges.

For the remainder of 2005, Russell expects the following ranges:

• Third quarter earnings

– Total diluted EPS on an ongoing basis, between $.62 and $.70

• Fourth quarter earnings

– Total diluted EPS on an ongoing basis, between $.52 and $.60

Conference Call Information

Management will have a conference call today, July 28, 2005, at 8:30 a.m. Eastern Time to discuss the second quarter results. The call may be accessed at (877) 264-7865 (domestically), and (706) 634-4917 (internationally), using conference call ID number 7767816. The call will also be simultaneously web cast via the Investor Relations homepage of the Company’s website athttp://www.russellcorp.com. A replay of the call will be available through the website for 30 days. In addition, you can register through the above referenced website if you would like to receive press releases, conference call reminders and other notices.

About Russell Corporation

Russell Corporation is a leading branded athletic and sporting goods company marketing athletic apparel, uniforms, footwear and equipment for a wide variety of sports, outdoor and fitness activities. The Company’s major brands included in the Sporting Goods Segment are: Russell Athletic^®, Spalding^®, Brooks^®, Huffy Sports^®, Bike^®, Moving Comfort^®, AAI^® and Mossy Oak^®. The predominant brand in the Activewear segment is JERZEES^®. The Company’s common stock is listed on the New York Stock Exchange under the symbol RML and its web site address ishttp://www.russellcorp.com.

Forward-Looking Statement

This Press Release includes certain “forward-looking” statements (as defined by the Private Securities Litigation Reform Act of 1995 (the “Act”)) that describe our beliefs concerning future business conditions, prospects, growth opportunities, and the outlook for the Company based upon currently available information. Wherever possible, we have identified these statements by words such as “anticipate”, “believe”, “intend”, “expect”, “continue”, “could”, “may”, “plan”, “project”, “predict”, “will” and similar expressions. We include such statements because we believe it is important to communicate our future expectations to our stockholders, and we therefore make such statements in reliance upon the safe harbor provisions of the Act. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including, but not limited to, any projections of sales and earnings. These forward-looking statements are based upon assumptions that we believe are reasonable. Factors that could cause our actual results to differ materially from those expressed or implied in such forward-looking statements include, but are not limited to: (a) risks associated with the Mossy Oak business; (b) our ability to leverage growth opportunities; (c) risks associated with our long-term business strategies, including the integration of the Spalding, AAI and Huffy Sports businesses; (d) our ability to effect cost reductions and resolve current operational issues; (e) changes in customer demand for our products; and (f) other risk factors listed in our reports filed with the Securities and Exchange Commission from time to time. We undertake no obligation to revise the forward-looking statements included in this Press Release to reflect any future events or circumstances. Our actual results, performance or achievements could differ materially from the results expressed or implied by any forward-looking statements contained in this Press Release.

RUSSELL CORPORATION

Consolidated Statements of Income

(In Thousands Except Share and Per Share Amounts)

	Quarter-to-Date						Year-to-Date
	13 Weeks			13 Weeks			26 Weeks			26 Weeks
	Ended			Ended			Ended			Ended
	July 3, 2005			July 4, 2004			July 3, 2005			July 4, 2004
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Net sales	$	342,099		$	289,771		$	655,341		$	541,564
Cost of goods sold		251,895			209,426			479,245			396,586
Gross profit		90,204			80,345			176,096			144,978
Selling, general and administrative expenses		73,186			61,686			146,703			118,164
Other income – net		(1,023	)		(5,247	)		(1,568	)		(5,109	)
Operating income		18,041			23,906			30,961			31,923
Interest expense, net		10,064			7,754			18,953			14,941
Non-controlling interests		747			274			1,421			274
Income before income taxes		7,230			15,878			10,587			16,708
Provision for income taxes		2,566			5,716			3,741			6,015
Net income	$	4,664		$	10,162		$	6,846		$	10,693
Weighted-average common shares outstanding:
Basic		32,980,182			32,652,492			32,919,043			32,614,822
Diluted		33,540,238			32,836,177			33,368,450			32,843,219
Net income per common share:
Basic	$	0.14		$	0.31		$	0.21		$	0.33
Diluted	$	0.14		$	0.31		$	0.21		$	0.33

RUSSELL CORPORATION

Consolidated Balance Sheets

(In Thousands Except Share and Per Share Amounts)

	July 3, 2005			January 1, 2005			July 4, 2004
	(Unaudited)			(Note)			(Unaudited)
ASSETS
Current assets:
Cash	$	44,784		$	29,816		$	21,789
Accounts receivable, net		268,078			212,063			225,951
Inventories		466,089			411,701			424,593
Prepaid expenses and other current assets		19,752			17,737			23,614
Income tax receivable		15,647			6,101			10,353
Total current assets		814,350			677,418			706,300
Property, plant & equipment, net		316,246			322,890			317,303
Other assets		251,092			253,801			134,161
Total assets	$	1,381,688		$	1,254,109		$	1,157,764
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	172,721		$	190,422		$	166,347
Deferred income taxes		13,721			4,054			6,078
Short-term debt		14,975			18,190			9,481
Current maturities of long-term debt		2,024			6,938			6,882
Total current liabilities		203,441			219,604			188,788
Long-term debt, less current maturities		496,758			372,921			362,072
Deferred liabilities:
Income taxes		23,772			20,286			6,609
Pension and other		69,247			64,351			60,790
Non-controlling interests		14,842			14,096			12,348
Commitments and contingencies		—			—			—
Stockholders’ equity:
Common stock, par value $.01 per share; authorized 150,000,000 shares, issued 41,419,958 shares		414			414			414
Paid-in capital		38,325			40,716			38,665
Retained earnings		760,019			755,799			721,168
Treasury stock, at cost		(193,247	)		(201,171	)		(204,943	)
Accumulated other comprehensive loss		(31,883	)		(32,907	)		(28,147	)
Total stockholders’ equity		573,628			562,851			527,157
Total liabilities & stockholders’ equity	$	1,381,688		$	1,254,109		$	1,157,764
Note: Consolidated balance sheet at January 1, 2005 has been derived from audited financial statements.

RUSSELL CORPORATION

Consolidated Statements of Cash Flows

(In Thousands)

	26 Weeks Ended
	July 3, 2005			July 4, 2004
	(Unaudited)			(Unaudited)
Operating Activities:
Net income	$	6,846		$	10,693
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation		25,304			23,470
Amortization		1,785			615
Earnings of non-controlling interests		1,421			274
Provision for deferred income taxes		11,029			—
Gain on sale of assets		(597	)		(4,614	)
Other		3,830			2,132
Changes in operating assets & liabilities:
Trade accounts receivable		(63,289	)		(46,954	)
Inventories		(57,469	)		(72,821	)
Prepaid expenses and other current assets		(2,144	)		(811	)
Other assets		(442	)		3,785
Accounts payable and accrued expenses		(10,605	)		13,462
Income taxes		(9,267	)		4,294
Pension and other deferred liabilities		4,896			925
Net cash used in operating activities		(88,702	)		(65,550	)
Investing Activities:
Purchases of property, plant & equipment		(20,936	)		(10,221	)
Proceeds from the sale of property, plant & equipment and other assets		2,687			1,769
Net cash refund from (paid for) acquisitions, joint ventures and other		3,402			(14,758	)
Other		(196	)		1,469
Net cash used in investing activities		(15,043	)		(21,741	)
Financing Activities:
Borrowings on credit facility and other – net		118,838			80,424
Borrowings on short-term debt		(1,889	)		1,617
Dividends on common stock		(2,626	)		(2,605	)
Treasury stock re-issued		4,484			1,759
Cost of common stock for treasury		(30	)		(17	)
Net cash provided by financing activities		118,777			81,178
Effect of exchange rate changes on cash		(64	)		(73	)
Net increase (decrease) in cash		14,968			(6,186	)
Increase in cash from consolidating Frontier Yarns, LLC		—			7,859
Cash balance at beginning of period		29,816			20,116
Cash balance at end of period	$	44,784		$	21,789
Supplemental schedule of noncash investing and financing activities:
Sold building – portion of proceeds in the form of a note	$	—		$	1,500
Sold investment – proceeds in the form of stock and cash		—			9,519
Noncash investing and financing activities	$	—		$	11,019

RUSSELL CORPORATION

FINANCIAL DATA BY REPORTABLE SEGMENT:

(In Thousands)

	Q2						Q2 YTD
	13 Weeks Ended						26 Weeks Ended
	July 3, 2005			July 4, 2004			July 3, 2005			July 4, 2004
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
NET SALES
Sporting Goods	$	160,282		$	124,122		$	325,585		$	245,701
Activewear		167,833			151,702			298,159			269,117
All Other		13,984			13,947			31,597			26,746
TOTAL NET SALES	$	342,099		$	289,771		$	655,341		$	541,564
SEGMENT OPERATING INCOME
Sporting Goods	$	6,956		$	12,267	*	$	19,399		$	24,555	*
Activewear		11,868			13,350			14,965			10,750
All Other		886			2,018			3,834			3,156
TOTAL SEGMENT OPERATING INCOME	$	19,710		$	27,635		$	38,198		$	38,461
Reconciliation of total segment operating income to consolidated income before income taxes
Total Segment operating Income	$	19,710		$	27,635		$	38,198		$	38,461
Unallocated amounts:
Corporate Expenses		(2,416	)		(4,003	)		(8,658	)		(6,812	)
Interest expense, net		(10,064	)		(7,754	)		(18,953	)		(14,941	)
CONSOLIDATED INCOME BEFORE INCOME TAXES	$	7,230		$	15,878		$	10,587		$	16,708
* Includes one-time gain on the sale of Marmot Mountain, Ltd. of $4.4 Million