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These excerpts taken from the HBI 10-Q filed May 11, 2009. Year
Ended January 2, 2010 Actions
During the first quarter ended April 4, 2009, the Company
approved actions to close three manufacturing facilities and one
distribution center in the Dominican Republic, Honduras, the
United States and Canada, and eliminate an aggregate of
approximately 2,600 positions in those countries and El
Salvador. The production capacity represented by the
manufacturing facilities has been relocated to lower cost
locations in Asia, Central America and the Caribbean Basin. The
distribution capacity has been relocated to the Company’s
West Coast distribution center in California in order to expand
capacity for goods the Company sources from Asia. In addition,
approximately 50 management and administrative positions were
eliminated, with the majority of
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HANESBRANDS
INC.
Notes to Condensed Consolidated Financial Statements — (Continued) (dollars and shares in thousands, except per share data) (unaudited)
these positions based in the United States. The Company recorded
charges of $8,655 in the quarter ended April 4, 2009. In
the first quarter ended April 4, 2009, the Company
recognized $6,264 for employee termination and other benefits
recognized in accordance with benefit plans previously
communicated to the affected employee group, $1,362 for
noncancelable lease and other contractual obligations related to
the closure of certain manufacturing facilities, $843 for
write-offs of stranded raw materials and work in process
inventory determined not to be salvageable or cost-effective to
relocate related to the closure of certain manufacturing
facilities, $129 for other exit costs and $57 for accelerated
depreciation of buildings and equipment. These charges are
reflected in the “Restructuring” and “Cost of
sales” lines of the Condensed Consolidated Statement of
Income. All actions are expected to be completed within a
12-month
period.
Year
Ended January 3, 2009 Actions
During the first quarter ended April 4, 2009, the Company
recognized additional charges associated with facility closures
announced in the year ended January 3, 2009, resulting in
an increase of $13,055 to loss before income tax benefit. The
company recognized charges of $7,943 for lease termination costs
associated with plant closures announced in the year ended
January 3, 2009, $2,867 for other exit costs and $2,245 for
write-offs of stranded raw materials and work in process
inventory determined not to be salvageable or cost-effective to
relocate related to the closure of certain manufacturing
facilities. These charges are reflected in the
“Restructuring” and “Cost of sales” lines of
the Condensed Consolidated Statement of Income.
Inventories consisted of the following:
The changes in the Company’s allowance for doubtful
accounts and allowance for chargebacks and other deductions for
the quarter ended April 4, 2009 are as follows:
Charges to the allowance for doubtful accounts are reflected in
the “Selling, general and administrative expenses”
line and charges to the allowance for customer chargebacks and
other customer deductions are primarily reflected as a reduction
in the “Net sales” line of the Condensed Consolidated
Statements of Income. Deductions and write-offs, which do not
increase or decrease income, represent write-offs of previously
reserved accounts receivables and allowed customer chargebacks
and deductions against gross accounts receivable.
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HANESBRANDS
INC.
Notes to Condensed Consolidated Financial Statements — (Continued) (dollars and shares in thousands, except per share data) (unaudited) This excerpt taken from the HBI DEF 14A filed Mar 10, 2008. 2008
Actions
In January 2008, the Compensation Committee engaged in a review
of total compensation opportunities for Hanesbrands’
executive officers, including the named executive officers,
applying the executive compensation benchmarking criteria.
As a result of such review, the Compensation Committee
determined not to increase the total compensation opportunity of
Mr. Noll or change the allocation among base salary, bonus
and long-term equity compensation. Mr. Noll’s base
salary will remain $800,000. His annual bonus opportunity
pursuant to the AIP will continue to be 0%, 150% and 225% of
base salary at the threshold, target and maximum levels of
performance by the Company relative to the targets set by the
Committee, respectively. Mr. Noll will receive an equity
grant with the same value as that which he received in 2007,
which is equal to 575% of base salary. Unlike the award
Mr. Noll received in 2007, 75% of the value of which was in
the form of stock options and 25% of the value of which was in
the form of restricted stock units, the entire value of
Mr. Noll’s equity award for 2008 will be in the form
of stock options.
Also as a result of such review, the Compensation Committee
determined to increase the total compensation opportunities of
Mr. Wyatt, Mr. Evans and Mr. Oliver.
Mr. Wyatt’s total compensation opportunity was
increased by increasing his annual base salary from $550,000 to
$585,000. In determining the appropriateness of increasing total
compensation opportunity through an increase in base salary, the
Compensation Committee, in addition to applying the executive
compensation benchmarking criteria, considered that
Mr. Wyatt’s base salary had not changed since he
joined our company in September 2005.
The Compensation Committee determined to increase
Mr. Evans’ total compensation opportunity by
increasing his base salary from $425,000 to $600,000. In
addition to the executive compensation benchmarking criteria,
the Compensation Committee considered the critical nature of
Mr. Evans’ position to Hanesbrands and his unique
skill set that combines marketing and supply chain expertise. In
determining the appropriateness of
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increasing total compensation opportunity through an increase in
base salary, the Compensation Committee, in addition to applying
the executive compensation benchmarking criteria, considered
that Mr. Evans’ base salary had not changed since July
2006.
The Compensation Committee determined to increase
Mr. Oliver’s total compensation opportunity by
increasing his base salary from $330,000 to $375,000. The
Compensation Committee also increased the target bonus
opportunity for Mr. Oliver from 85% to 100% of his base
salary and the maximum bonus opportunity from 127.5% to 150% of
his base salary. The Compensation Committee also increased
Mr. Oliver’s equity compensation from 150% to 200% of
his base salary. In addition to applying the executive
compensation benchmarking criteria, the Compensation Committee
considered the global nature of Mr. Oliver’s position
and that Mr. Oliver’s cash compensation had not been
increased since 2005 in determining that an increase in total
compensation opportunity was appropriate.
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