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This excerpt taken from the HBI 10-Q filed May 11, 2009. Consolidation
and Globalization Strategy
We expect to continue our restructuring efforts through 2009 as
we continue to execute our consolidation and globalization
strategy. We have closed plant locations, reduced our workforce,
and relocated some of our manufacturing capacity to lower cost
locations in Asia, Central America and the Caribbean Basin.
During the quarter ended April 4, 2009, in furtherance of
our consolidation and globalization strategy, we 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. In addition, approximately 50 management and
administrative positions were eliminated, with the majority of
these positions based in the United States. We also have
recognized accelerated depreciation with respect to owned or
leased assets associated with manufacturing facilities and
distribution centers which closed during 2009 or we anticipate
closing in the next year as part of our consolidation and
globalization strategy. While we believe that this strategy has
had and will continue to have a beneficial impact on our
operational efficiency and cost structure, we have incurred
significant costs to implement these initiatives. In particular,
we have recorded charges for severance and other
employment-related obligations relating to workforce reductions,
as well as payments in connection with lease and other contract
terminations. In addition, we incurred charges for one-time
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 manufacturing facilities.
These amounts are included in the “Cost of sales,”
“Restructuring” and “Selling, general and
administrative expenses” lines of our statements of income.
We have made significant progress in our multiyear goal of
generating gross savings that could approach or exceed
$200 million. As a result of the restructuring actions
taken since our spin off from Sara Lee Corporation on
September 5, 2006, our cost structure has been reduced and
efficiencies improved, generating savings of $18 million
during the quarter ended April 4, 2009. In addition to the
savings generated from restructuring actions, we benefited from
$13 million in savings related to other cost reduction
initiatives during the quarter ended April 4, 2009.
This excerpt taken from the HBI 10-Q filed Oct 31, 2008. Consolidation
and Globalization Strategy
We expect to continue our restructuring efforts as we continue
to execute our consolidation and globalization strategy. The
implementation of these efforts, which are designed to improve
operating efficiencies and lower costs, has resulted and is
likely to continue to result in significant costs in the
short-term and generate savings as well as higher inventory
levels for a period of time. As further plans are developed and
approved by management and in some cases our board of directors,
we expect to recognize additional restructuring to eliminate
duplicative functions within the organization and transition a
significant portion of our manufacturing capacity to lower-cost
locations.
While capital spending could vary significantly from year to
year, we anticipate that our capital spending over the next
three years could be as high as $500 million as we execute
our supply chain consolidation and globalization strategy and
complete the integration and consolidation of our technology
systems. Capital spending in any given year over the next three
years could be as high as $100 million in excess of our
annual depreciation and amortization expense until the
completion of actions related to our globalization strategy at
which time we would expect our annual capital spending to be
relatively comparable to our annual depreciation and
amortization expense. The majority of our capital spending will
be focused on growing our supply chain operations in Central
America, the Caribbean Basin and Asia. These locations will
enable us to expand and leverage our large production scale as
we balance our supply chain across hemispheres.
As we continue to add new manufacturing capacity in Central
America, the Caribbean Basin and Asia, our exposure to events
that could disrupt our foreign supply chain, including political
instability, acts of war or terrorism or other international
events resulting in the disruption of trade, disruptions in
shipping and freight forwarding services, increases in oil
prices (which would increase the cost of shipping),
interruptions in the availability of basic services and
infrastructure and fluctuations in foreign currency exchange
rates, is increased.
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Disruptions in our foreign supply chain could negatively impact
our liquidity by interrupting production in facilities outside
the United States, increasing our cost of sales, disrupting
merchandise deliveries, delaying receipt of the products into
the United States or preventing us from sourcing our products at
all. Depending on timing, these events could also result in lost
sales, cancellation charges or excessive markdowns.
This excerpt taken from the HBI 10-Q filed Aug 1, 2008. Consolidation
and Globalization Strategy
We expect to continue our restructuring efforts as we continue
to execute our consolidation and globalization strategy. The
implementation of these efforts, which are designed to improve
operating efficiencies and lower costs, has resulted and is
likely to continue to result in significant costs and savings as
well as higher inventory levels for a period of time. As further
plans are developed and approved by management and in some cases
our board of directors, we expect to recognize additional
restructuring to eliminate duplicative functions within the
organization and transition a significant portion of our
manufacturing capacity to lower-cost locations.
While capital spending could vary significantly from year to
year, we anticipate that our capital spending over the next
three years could be as high as $500 million as we execute
our supply chain consolidation and globalization strategy and
complete the integration and consolidation of our technology
systems. Capital spending in any given year over the next three
years could be as high as $100 million in excess of our
annual depreciation and amortization expense until the
completion of actions related to our globalization strategy at
which time we would expect our annual capital spending to be
relatively comparable to our annual depreciation and
amortization expense. The majority of our capital spending will
be focused on growing our supply chain operations in Central
America, the Caribbean Basin and Asia. These locations will
enable us to expand and leverage our large production scale as
we balance our supply chain across hemispheres.
As we continue to add new manufacturing capacity in Central
America, the Caribbean Basin and Asia, our exposure to events
that could disrupt our foreign supply chain, including political
instability, acts of war or terrorism or other international
events resulting in the disruption of trade, disruptions in
shipping and freight forwarding services, increases in oil
prices (which would increase the cost of shipping),
interruptions in the availability of basic services and
infrastructure and fluctuations in foreign currency exchange
rates, is increased. Disruptions in our foreign supply chain
could negatively impact our liquidity by interrupting
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production in facilities outside the United States, increasing
our cost of sales, disrupting merchandise deliveries, delaying
receipt of the products into the United States or preventing us
from sourcing our products at all. Depending on timing, these
events could also result in lost sales, cancellation charges or
excessive markdowns.
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