Hanesbrands (HBI)

 

Net cash used in operating activities was $58 million in 2009 compared to $19 million in 2008. The net change in cash used in operating activities of $39 million for 2009 compared to 2008 is primarily attributable to lower net income and higher uses of our working capital which was primarily driven by changes in accounts receivable and accounts payable offset by inventory. Inventory grew $13 million from January 3, 2009 primarily due to increases of $41 million resulting from temporary higher unit levels intended to service the normal pattern of building inventories for back to school selling seasons partially offset by decreases of $28 million for input costs such as cotton, oil and freight. We continually monitor our inventory levels to best balance current supply and demand with potential future demand that typically surges when consumers no longer postpone purchases in our product categories. Over the next nine months, we expect to decrease our inventory levels to approximately $1.15 billion as we complete the execution of our supply chain consolidation and globalization strategy.

 

 

Net cash used in operating activities was $19 million in the nine months of 2008 compared to cash provided by operating activities of $236 million in 2007. The net change in cash from operating activities of $255 million for the nine months of 2008 compared to 2007 is attributable to the higher uses of our working capital which was primarily driven by changes in inventory. Inventory grew $243 million from December 2007 primarily due to increases in levels needed to service our business over the next eighteen months as we execute our consolidation and globalization strategy which had an impact of approximately $185 million. In addition, cost increases for inputs such as cotton, oil and freight were approximately $52 million and the currency impact was approximately $6 million. We continually monitor our inventory levels to best balance current supply and demand with potential future demand that typically surges when consumers no longer postpone purchases in our product categories.

 

 

 Net cash used in operating activities was $50 million in the six months of 2008 compared to cash provided by operating activities of $102 million in 2007. The net change in cash from operating activities of $152 million for the six months of 2008 compared to 2007 is attributable to the higher uses of our working capital which was primarily driven by changes in inventory and accrued liabilities offset by accounts receivable and accounts payable. Inventory grew $221 million from December 2007 primarily due to increases in levels to service our business over the next eighteen months as we execute our consolidation and globalization strategy and to build for back-to-school programs, as well as a shift in timing by our largest retail customers of back-to-school programs from June to July 2008, all of which had a combined impact of approximately $159 million. In addition, cost increases for inputs such as cotton, oil, freight and currency were approximately $47 million. We continually monitor our inventory levels to best balance current supply and demand with potential future demand that typically surges when consumers no longer postpone purchases in our product categories.

 

 

Net cash used in operating activities was $19 million in the first quarter of 2008 compared to $1 million in 2007. The higher cash used in operating activities of $18 million is attributable to the higher uses of our working capital which was primarily driven by changes in inventory and accrued liabilities offset by accounts receivable. While inventory levels grew $107 million from December 2007 year-end levels as we build for back-to-school programs, inventory levels are lower compared to the first quarter of 2007 by $30 million. We monitor our inventory levels to best balance current supply and demand with potential future demand that typically surges when consumers no longer postpone purchases in our product categories.