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This excerpt taken from the HBI 10-Q filed May 11, 2009. Overview
We are a consumer goods company with a portfolio of leading
apparel brands, including Hanes, Champion, C9 by Champion,
Playtex, Bali, L’eggs, Just My Size, barely there,
Wonderbra, Stedman, Outer Banks, Zorba, Rinbros and
Duofold. We design, manufacture, source and sell a broad
range of apparel essentials such as t-shirts, bras, panties,
men’s underwear, kids’ underwear, casualwear,
activewear, socks and hosiery.
Our operations are managed in five operating segments, each of
which is a reportable segment for financial reporting purposes:
Innerwear, Outerwear, International, Hosiery and Other. These
segments are organized principally by product category and
geographic location. Management of each segment is responsible
for the operations of these segments’ businesses but shares
a common supply chain and media and marketing platforms.
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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.
Seasonality
and Other Factors
Our operating results are subject to some variability.
Generally, our diverse range of product offerings helps mitigate
the impact of seasonal changes in demand for certain items.
Sales are typically higher in the last two quarters (July to
December) of each fiscal year. Socks, hosiery and fleece
products generally have higher sales during this period as a
result of cooler weather,
back-to-school
shopping and holidays. Sales levels in any period are also
impacted by customers’ decisions to increase or decrease
their inventory levels in
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response to anticipated consumer demand. Our customers may
cancel orders, change delivery schedules or change the mix of
products ordered with minimal notice to us. For example, we
experienced a shift in timing by our largest retail customers of
back-to-school
programs from June to July in 2008. Our results of operations
are also impacted by fluctuations and volatility in the price of
cotton and oil-related materials and the timing of actual
spending for our media, advertising and promotion expenses.
Media, advertising and promotion expenses may vary from period
to period during a fiscal year depending on the timing of our
advertising campaigns for retail selling seasons and product
introductions.
Although the majority of our products are replenishment in
nature and tend to be purchased by consumers on a planned,
rather than on an impulse, basis, our sales are impacted by
discretionary spending by our customers. Discretionary spending
is affected by many factors, including, among others, general
business conditions, interest rates, inflation, consumer debt
levels, the availability of consumer credit, currency exchange
rates, taxation, electricity power rates, gasoline prices,
unemployment trends and other matters that influence consumer
confidence and spending. Many of these factors are outside of
our control. Our customers’ purchases of discretionary
items, including our products, could decline during periods when
disposable income is lower, when prices increase in response to
rising costs, or in periods of actual or perceived unfavorable
economic conditions. These consumers may choose to purchase
fewer of our products or lower-priced products of our
competitors in response to higher prices for our products, or
may choose not to purchase our products at prices that reflect
our price increases that become effective from time to time.
Inflation
and Changing Prices
Inflation can have a long-term impact on us because increasing
costs of materials and labor may impact our ability to maintain
satisfactory margins. For example, a significant portion of our
products are manufactured in other countries and declines in the
value of the U.S. dollar may result in higher manufacturing
costs. Similarly, the cost of the materials that are used in our
manufacturing process, such as oil-related commodity prices,
rose during the summer of 2008 as a result of inflation and
other factors. In addition, inflation often is accompanied by
higher interest rates, which could have a negative impact on
spending, in which case our margins could decrease. Moreover,
increases in inflation may not be matched by rises in income,
which also could have a negative impact on spending. If we incur
increased costs that are unable to be recouped, or if consumer
spending continues to decrease generally, our business, results
of operations, financial condition and cash flows may be
adversely affected. In an effort to mitigate the impact of these
incremental costs on our operating results, we raised domestic
prices effective February 2009. We implemented an average gross
price increase of four percent in our domestic product
categories. The range of price increases varies by individual
product category.
Our costs for cotton yarn and cotton-based textiles vary based
upon the fluctuating cost of cotton, which is affected by
weather, consumer demand, speculation on the commodities market,
the relative valuations and fluctuations of the currencies of
producer versus consumer countries and other factors that are
generally unpredictable and beyond our control. While we do
enter into short-term supply agreements and hedges from time to
time in an attempt to protect our business from the volatility
of the market price of cotton, our business can be affected by
dramatic movements in cotton prices, although cotton
historically represents only 8% of our cost of sales. The cotton
prices reflected in our results were 74 cents per pound for the
quarter ended April 4, 2009 and 54 cents per pound for the
quarter ended March 29, 2008. After taking into
consideration the cotton costs currently included in inventory
and short-term supply agreements, we expect our cost of cotton
to average 55 cents per pound for the full year of 2009 compared
to 65 cents per pound for 2008. In addition, during the summer
of 2008 we experienced a spike in oil-related commodity prices
and other raw materials used in our products, such as dyes and
chemicals, and increases in other costs, such as fuel, energy
and utility costs.
This excerpt taken from the HBI 10-Q filed Oct 31, 2008. Overview
We are a consumer goods company with a portfolio of leading
apparel brands, including Hanes, Champion,
Playtex, Bali, Just My Size, barely
there and Wonderbra. We design, manufacture, source
and sell a broad range of apparel essentials such as t-shirts,
bras, panties, men’s underwear, kids’ underwear,
socks, hosiery, casualwear and activewear.
Our operations are managed in five operating segments, each of
which is a reportable segment for financial reporting purposes:
Innerwear, Outerwear, Hosiery, International and Other. These
segments are organized principally by product category and
geographic location. Management of each segment is responsible
for the operations of these businesses.
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Our operating results are subject to some variability.
Generally, our diverse range of product offerings helps mitigate
the impact of seasonal changes in demand for certain items.
Sales are typically higher in the last two quarters (July to
December) of each fiscal year. Socks, hosiery and fleece
products generally have higher sales during this period as a
result of cooler weather, back-to-school shopping and holidays.
Sales levels in a period are also impacted by customers’
decisions to increase or decrease their inventory levels in
response to anticipated consumer demand. Our customers may
cancel orders, change delivery schedules or change the mix of
products ordered with minimal notice to us. For example, we
experienced a shift in timing by our largest retail customers of
back-to-school programs from June to July in 2008. Our results
of operations are also impacted by fluctuations and volatility
in the price of cotton and the timing of actual spending for our
media, advertising and promotion expenses. Media, advertising
and promotion expenses may vary from period to period during a
fiscal year depending on the timing of our advertising campaigns
for retail selling seasons and product introductions.
Our operating results are also impacted by economic factors,
some of which are beyond our control. Inflation can have a
long-term impact on us because increasing costs of materials and
labor may impact our ability to maintain satisfactory margins.
In addition, inflation often is accompanied by higher interest
rates, which could have a negative impact on spending, in which
case our margins could decrease. Moreover, increases in
inflation may not be matched by rises in income, which also
could have a negative impact on spending. If we incur increased
costs that are unable to be recouped, or if consumer spending
decreases generally, our business, results of operations,
financial condition and cash flows may be adversely affected. In
an effort to mitigate the impact of these incremental costs on
our operating results, we have informed our retail customers
that we are raising domestic prices effective during the first
quarter of 2009. We are implementing an average gross price
increase of four percent in our domestic product categories. The
range of price increases varies by individual product category.
This excerpt taken from the HBI 10-Q filed Aug 1, 2008. Overview
We are a consumer goods company with a portfolio of leading
apparel brands, including Hanes, Champion,
Playtex, Bali, Just My Size, barely
there and Wonderbra. We design, manufacture, source
and sell a broad range of apparel essentials such as t-shirts,
bras, panties, men’s underwear, kids’ underwear,
socks, hosiery, casualwear and activewear.
Our operations are managed in five operating segments, each of
which is a reportable segment for financial reporting purposes:
Innerwear, Outerwear, Hosiery, International and Other. These
segments are organized principally by product category and
geographic location. Management of each segment is responsible
for the operations of these businesses.
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Our operating results are subject to some variability.
Generally, our diverse range of product offerings helps mitigate
the impact of seasonal changes in demand for certain items.
Sales are typically higher in the last two quarters (July to
December) of each fiscal year. Socks, hosiery and fleece
products generally have higher sales during this period as a
result of cooler weather, back-to-school shopping and holidays.
Sales levels in a period are also impacted by customers’
decisions to increase or decrease their inventory levels in
response to anticipated consumer demand. Our customers may
cancel orders, change delivery schedules or change the mix of
products ordered with minimal notice to us. Our results of
operations are also impacted by fluctuations and volatility in
the price of cotton and the timing of actual spending for our
media, advertising and promotion expenses. Media, advertising
and promotion expenses may vary from period to period during a
fiscal year depending on the timing of our advertising campaigns
for retail selling seasons and product introductions.
This excerpt taken from the HBI 10-Q filed May 7, 2008. Overview
We are a consumer goods company with a portfolio of leading
apparel brands, including Hanes, Champion,
Playtex, Bali, Just My Size, barely
there and Wonderbra. We design, manufacture, source
and sell a broad range of apparel essentials such as t-shirts,
bras, panties, men’s underwear, kids’ underwear,
socks, hosiery, casualwear and activewear.
Our operations are managed in five operating segments, each of
which is a reportable segment for financial reporting purposes:
Innerwear, Outerwear, Hosiery, International and Other. These
segments are organized principally by product category and
geographic location. Management of each segment is responsible
for the operations of these businesses.
Table of Contents
Our operating results are subject to some variability.
Generally, our diverse range of product offerings helps mitigate
the impact of seasonal changes in demand for certain items.
Sales are typically higher in the last two quarters (July to
December) of each fiscal year. Socks, hosiery and fleece
products generally have higher sales during this period as a
result of cooler weather, back-to-school shopping and holidays.
Sales levels in a period are also impacted by customers’
decisions to increase or decrease their inventory levels in
response to anticipated consumer demand. Our customers may
cancel orders, change delivery schedules or change the mix of
products ordered with minimal notice to us. Our results of
operations are also impacted by fluctuations and volatility in
the price of cotton and the timing of actual spending for our
media, advertising and promotion expenses. Media, advertising
and promotion expenses may vary from period to period during a
fiscal year depending on the timing of our advertising campaigns
for retail selling seasons and product introductions. Our costs
for cotton yarn and cotton-based textiles vary based upon the
fluctuating cost of cotton, which is affected by weather,
consumer demand, speculation on the commodities market, the
relative valuations and fluctuations of the currencies of
producer versus consumer countries and other factors that are
generally unpredictable and beyond our control. While we do
enter into short-term supply agreements and hedges in an attempt
to protect our business from the volatility of the market price
of cotton, our business can be affected by dramatic movements in
cotton prices, although cotton has historically represented only
6% of our cost of sales. Cotton prices were 54 cents per pound
in the first quarter of 2008 as compared to 56 cents per pound
in the first quarter of 2007. Taking into consideration the
agreements that we currently have in effect and cotton costs
currently included in inventory, we expect our cost of cotton to
average 66 cents per pound for the full year 2008. The price of
cotton currently in our inventory has risen to the 70 cents per
pound range which is the price that will impact our operating
results in the third and fourth quarters of 2008. Additionally,
the prices for the cotton crop grown this coming summer season,
which will impact our operating results in 2009, have risen to
the upper 70 cents per pound range.
These excerpts taken from the HBI 10-K filed Feb 19, 2008. Overview
We market our products under hundreds of trademarks, service
marks and trade names in the United States and other countries
around the world, the most widely recognized being Hanes,
Champion, Playtex, Bali, Just My
Size, barely there, Wonderbra, C9 by
Champion, L’eggs, Outer Banks and Duofold.
Some of our products are sold under trademarks that have
been licensed from third parties, such as Polo Ralph Lauren
men’s underwear, and we also hold licenses from various
toy and media companies that give us the right to use certain of
their proprietary characters, names and trademarks.
Some of our own trademarks are licensed to third parties for
noncore product categories, such as Champion for
athletic-oriented accessories. In the United States, the
Playtex trademark is owned by Playtex Marketing
Corporation, of which we own a 50% share and which grants to us
a perpetual royalty-free license to the Playtex trademark
on and in connection with the sale of apparel in the United
States and Canada. The other 50% share of Playtex Marketing
Corporation is owned by Playtex Products, Inc., an unrelated
third-party, which has a perpetual royalty-free license to the
Playtex trademark on and in connection with the sale of
non-apparel products in the United States. Outside the United
States and Canada, we own the Playtex trademark and
perpetually license such trademark to Playtex Products, Inc. for
non-apparel products. In addition, as described below, as part
of Sara Lee’s sale in February 2006 of its European branded
apparel business, an affiliate of Sun Capital Partners, Inc., or
“Sun Capital,” has an exclusive, perpetual,
royalty-free license to manufacture, sell and distribute apparel
products under the Wonderbra and Playtex
trademarks in the member states of the EU, as well as
several other European nations and South Africa. We also own a
number of copyrights. Our trademarks and copyrights are
important to our marketing efforts and have substantial value.
We aggressively protect these trademarks and copyrights from
infringement and dilution through appropriate measures,
including court actions and administrative proceedings.
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Although the laws vary by jurisdiction, trademarks generally
remain valid as long as they are in use
and/or their
registrations are properly maintained. Most of the trademarks in
our portfolio, including our core brands, are covered by
trademark registrations in the countries of the world in which
we do business, with registration periods ranging between seven
and 20 years depending on the country. Trademark
registrations can be renewed indefinitely as long as the
trademarks are in use. We have an active program designed to
ensure that our trademarks are registered, renewed, protected
and maintained. We plan to continue to use all of our core
trademarks and plan to renew the registrations for such
trademarks for as long as we continue to use them. Most of our
copyrights are unregistered, although we have a sizable
portfolio of copyrighted lace designs that are the subject of a
number of registrations at the U.S. Copyright Office.
We place high importance on product innovation and design, and a
number of these innovations and designs are the subject of
patents. However, we do not regard any segment of our business
as being dependent upon any single patent or group of related
patents. In addition, we own proprietary trade secrets,
technology, and know how that we have not patented.
Overview We market our products under hundreds of trademarks, service marks and trade names in the United States and other countries around the world, the most widely recognized being Hanes, Champion, Playtex, Bali, Just My Size, barely there, Wonderbra, C9 by Champion, L’eggs, Outer Banks and Duofold. Some of our products are sold under trademarks that have been licensed from third parties, such as Polo Ralph Lauren men’s underwear, and we also hold licenses from various toy and media companies that give us the right to use certain of their proprietary characters, names and trademarks. Some of our own trademarks are licensed to third parties for noncore product categories, such as Champion for athletic-oriented accessories. In the United States, the Playtex trademark is owned by Playtex Marketing Corporation, of which we own a 50% share and which grants to us a perpetual royalty-free license to the Playtex trademark on and in connection with the sale of apparel in the United States and Canada. The other 50% share of Playtex Marketing Corporation is owned by Playtex Products, Inc., an unrelated third-party, which has a perpetual royalty-free license to the Playtex trademark on and in connection with the sale of non-apparel products in the United States. Outside the United States and Canada, we own the Playtex trademark and perpetually license such trademark to Playtex Products, Inc. for non-apparel products. In addition, as described below, as part of Sara Lee’s sale in February 2006 of its European branded apparel business, an affiliate of Sun Capital Partners, Inc., or “Sun Capital,” has an exclusive, perpetual, royalty-free license to manufacture, sell and distribute apparel products under the Wonderbra and Playtex trademarks in the member states of the EU, as well as several other European nations and South Africa. We also own a number of copyrights. Our trademarks and copyrights are important to our marketing efforts and have substantial value. We aggressively protect these trademarks and copyrights from infringement and dilution through appropriate measures, including court actions and administrative proceedings.
Table of ContentsAlthough the laws vary by jurisdiction, trademarks generally remain valid as long as they are in use and/or their registrations are properly maintained. Most of the trademarks in our portfolio, including our core brands, are covered by trademark registrations in the countries of the world in which we do business, with registration periods ranging between seven and 20 years depending on the country. Trademark registrations can be renewed indefinitely as long as the trademarks are in use. We have an active program designed to ensure that our trademarks are registered, renewed, protected and maintained. We plan to continue to use all of our core trademarks and plan to renew the registrations for such trademarks for as long as we continue to use them. Most of our copyrights are unregistered, although we have a sizable portfolio of copyrighted lace designs that are the subject of a number of registrations at the U.S. Copyright Office. We place high importance on product innovation and design, and a number of these innovations and designs are the subject of patents. However, we do not regard any segment of our business as being dependent upon any single patent or group of related patents. In addition, we own proprietary trade secrets, technology, and know how that we have not patented. This excerpt taken from the HBI 10-Q filed Nov 5, 2007. Overview
We are a consumer goods company with a portfolio of leading
apparel brands, including Hanes, Champion,
Playtex, Bali, Just My Size, barely
there and Wonderbra. We design, manufacture, source
and sell a broad range of apparel essentials such as t-shirts,
bras, panties, men’s underwear, kids’ underwear,
socks, hosiery, casualwear and activewear. Our brands hold
either the number one or number two U.S. market position by
sales in most product categories in which we compete.
Our operations are managed and reported in five operating
segments, each of which is a reportable segment: Innerwear,
Outerwear, Hosiery, International and Other. These segments are
organized principally by product category and geographic
location. Management of each segment is responsible for the
assets and operations of these businesses.
Table of Contents
Our operating results are subject to some variability.
Generally, our diverse range of product offerings helps mitigate
the impact of seasonal changes in demand for certain items.
Sales are typically higher in the last two quarters (July to
December) of each fiscal year. Socks, hosiery and fleece
products generally have higher sales during this period as a
result of cooler weather, back-to-school shopping and holidays.
Sales levels in a period are also impacted by customers’
decisions to increase or decrease their inventory levels in
response to anticipated consumer demand. Our customers may
cancel orders, change delivery schedules or change the mix of
products ordered with minimal notice to us. Our results of
operations are also impacted by fluctuations and volatility in
the price of cotton and the timing of actual spending for our
media, advertising and promotion expenses. Media, advertising
and promotion expenses may vary from period to period during a
fiscal year depending on the timing of our advertising campaigns
for retail selling seasons and product introductions. Our costs
for cotton yarn and cotton-based textiles vary based upon the
fluctuating cost of cotton, which is affected by weather,
consumer demand, speculation on the commodities market, the
relative valuations and fluctuations of the currencies of
producer versus consumer countries and other factors that are
generally unpredictable and beyond our control. While we do
enter into short-term supply agreements and hedges in an attempt
to protect our business from the volatility of the market price
of cotton, our business can be affected by dramatic movements in
cotton prices.
This excerpt taken from the HBI 10-Q filed Aug 3, 2007. Overview
We are a consumer goods company with a portfolio of leading
apparel brands, including Hanes, Champion,
Playtex, Bali, Just My Size, barely
there and Wonderbra. We design, manufacture, source
and sell a broad range of apparel essentials such as t-shirts,
bras, panties, men’s underwear, kids’ underwear,
socks, hosiery, casualwear and activewear. Our brands hold
either the number one or number two U.S. market position by
sales in most product categories in which we compete.
Our operations are managed and reported in five operating
segments, each of which is a reportable segment: Innerwear,
Outerwear, Hosiery, International and Other. These segments are
organized principally by product category and geographic
location. Management of each segment is responsible for the
assets and operations of these businesses.
Table of Contents
Our operating results are subject to some variability.
Generally, our diverse range of product offerings helps mitigate
the impact of seasonal changes in demand for certain items.
Sales are typically higher in the last two quarters (July to
December) of each fiscal year. Socks, hosiery and fleece
products generally have higher sales during this period as a
result of cooler weather, back-to-school shopping and holidays.
Sales levels in a period are also impacted by customers’
decisions to increase or decrease their inventory levels in
response to anticipated consumer demand. Our customers may
cancel orders, change delivery schedules or change the mix of
products ordered with minimal notice to us. Our results of
operations are also impacted by the timing of actual spending
for our media, advertising and promotion expenses. These
expenses may vary from period to period during a fiscal year
depending on the timing of our advertising campaigns for retail
selling seasons and product introductions.
This excerpt taken from the HBI 10-Q filed May 14, 2007. Overview
We are a consumer goods company with a portfolio of leading
apparel brands, including Hanes, Champion,
Playtex, Bali, Just My Size, barely
there and Wonderbra. We design, manufacture, source
and sell a broad range of apparel essentials such as t-shirts,
bras, panties, men’s underwear, kids’ underwear,
socks, hosiery, casualwear and activewear. Our brands hold
either the number one or number two U.S. market position by
sales in most product categories in which we compete.
Our operations are managed and reported in five operating
segments, each of which is a reportable segment: innerwear,
outerwear, hosiery, international and other. These segments are
organized principally by product category and geographic
location. Management of each segment is responsible for the
assets and operations of these businesses.
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This excerpt taken from the HBI 8-K filed Nov 29, 2006. Overview
MD&A is a supplement to our combined and consolidated
financial statements and notes thereto included elsewhere in
our Annual Report on
Form 10-K,
and is provided to enhance your understanding of our results of
operations and financial condition. Our MD&A is organized as
follows:
This excerpt taken from the HBI 10-Q filed Nov 13, 2006. Overview
We are a consumer goods company with a portfolio of leading
apparel brands, including Hanes, Champion,
Playtex, Bali, Just My Size, barely
there and Wonderbra. We design, manufacture, source
and sell a broad range of apparel essentials such as t-shirts,
bras, panties, men’s underwear, kids’ underwear,
socks, hosiery, casualwear and activewear. Our brands hold
either the number one or number two U.S. market position by
sales in most product categories in which we compete.
During the quarter ended September 30, 2006, we changed our
internal organizational structure such that operations are
managed and reported in five operating segments, each of which
is a reportable segment: innerwear, outerwear, hosiery,
international and other. These segments are organized
principally by product category and geographic location.
Management of each segment is responsible for the assets and
operations of these businesses. Beginning in the quarter ended
September 30, 2006, we began evaluating the operating
performance of our segments based upon segment operating profit,
which is defined as operating profit before general corporate
expenses, amortization of trademarks and other identifiable
intangibles and restructuring and related accelerated
depreciation charges. Previously, we evaluated segment operating
performance based upon segment operating profit which included
restructuring and related charges.
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