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UNITED STATES SECURITIES AND EXCHANGE
COMMISSION Washington, D.C. 20549
FORM 10-K
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
- - - - - - - - - ---- ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended January 1, 1994
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- - - - - - - - - ---- EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
--------------- --------------
Commission file number 0-1790
RUSSELL CORPORATION
(Exact name of registrant as specified in its charter)
Alabama 63-0180720
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1 Lee Street
Alexander City, Alabama 35010
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (205) 329-4000
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
------------------- ---------------------
Common Stock, $.01 par value New York Stock Exchange
Pacific Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months, and (2) has been subject
to such filing requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. / /
The aggregate market value of Common Stock, par value $.01, held by
non-affiliates of the registrant, as of March 9, 1994, was approximately
$841,000,000.
As of March 9, 1994, there were 39,683,165 shares of Common Stock, $.01
par value outstanding (excluding treasury shares).
-Continued-
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DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Shareholders Report for the year ended January
1, 1994 are incorporated by reference into Parts II and IV.
Portions of the Proxy Statement for the Annual Meeting of Shareholders
to be held on April 27, 1994 are incorporated by reference into Part III.
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PART I
ITEM 1. Business
GENERAL
Russell Corporation (together with its subsidiaries, the "Company") is
a vertically integrated international manufacturer and marketer of activewear,
licensed sports apparel, athletic uniforms, better knit shirts, and a
comprehensive line of lightweight, yarn-dyed woven fabrics. The Company's
manufacturing operations include the entire process of converting raw fibers
into finished apparel and fabrics. Russell's products are marketed through
three sales divisions--Athletic, Knit Apparel and Fabrics--as well as through
Cross Creek Apparel, Inc., Russell Corp. UK Limited and The Game Inc., three
wholly owned subsidiaries. Products are marketed to sporting goods dealers,
department and specialty stores, mass merchandisers, golf pro shops, college
bookstores, screen printers, distributors, mail-order houses, and other apparel
manufacturers. There was no material change in the nature of the business
conducted by Russell Corporation during 1993.
Of the Company's total revenues, more than ninety percent are derived
from the sale of completed apparel, with the balance from woven fabrics.
During the two previous fiscal years ending January 2, 1993 and January 4,
1992, completed apparel accounted for more than ninety percent of total
revenues. Foreign and export sales for 1993 and each of the immediately
preceding two years were less than ten percent of total net sales. One
customer, Wal-Mart Stores, Inc., accounted for 16.1 percent of total revenues
in 1993 and 12.9 percent in 1992. No single customer accounted for more than
ten percent of total revenues in 1991.
The Company produces athletic uniforms for most recognized sports
activities and for players of all ages and sizes. These products are marketed
to professional, collegiate, high school and other teams as well as to
individuals. Knit apparel, such as T-shirts, fleece sweatshirts and
sweatpants, pullovers, jackets, and other similar knitted products, is produced
for the general consumer market. Knit product lines also include knit placket
shirts, rugby-styled shirts and turtlenecks. Woven fabrics are produced and
sold to other apparel manufacturers for men's, women's and children's wear.
The Company's principal manufacturing facilities are located in and
around Alexander City, Alabama. It also operates 34 additional plants in other
communities in Alabama, Florida, Georgia, North Carolina and Virginia.
Warehousing and shipping is conducted in Alexander City, Dothan and Montgomery,
Alabama; Marianna and Miami, Florida; Mt. Airy, North Carolina; Columbus and
Snellville, Georgia; Chicago, Illinois; Sparks, Nevada; and Palisades Park, New
Jersey. The primary manufacturing and distribution facilities for Russell
Corp. UK Limited are located in and around Livingston, Scotland. The Company
also maintains warehouses in Mexico City and San Juan del Rio, Mexico.
As a vertically integrated operation, the Company converts raw fibers
into finished apparel and fabrics utilizing company-owned spinning mills,
knitting and weaving equipment, dyeing and finishing facilities, and cutting
and sewing operations. Generally, the Company produces most of the yarns,
other than textured and filament yarns, used in the manufacturing process. As
a result of its integrated production process, substantially all functions
required to produce finished apparel and fabrics can be performed by the
Company without reliance upon outside contractors. The Company does, however,
rely on outside suppliers for caps and certain licensed sports apparel
products.
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The Company benefits from flexibility in its production scheduling
capability, permitting it to shift product emphasis as markets improve, change
or temporarily decline for particular products. This ability to respond
quickly to market changes has enabled the Company to manage more effectively
the utilization of its manufacturing capacity.
The Company's revenue and income are subject to minor seasonal
variations. However, due to the time which may elapse between the placement of
orders and shipment of goods, prices may or may not immediately reflect changes
in the Company's cost of raw materials and other costs. Working capital needs
may change with the increase or decrease in inventories or accounts receivable
as a result of a variety of credit terms and time between production and
shipments. Production schedules are based upon current orders, the history of
customer orders, market research, and similar factors. The Company has no
meaningful backlog figures.
The Company does not hold any significant patents, franchises or
concessions. The Company's ability to manufacture and sell licensed apparel
products is dependent upon licenses held by the Company to utilize various
trademarks and tradenames on such apparel. These licenses are subject to
periodic renewal and negotiation and certain minimum payments.
MANUFACTURING
The Company has the capability of converting raw fibers into finished
products in major production complexes which are complemented by several
satellite production facilities in the same geographic areas. The Company
emphasizes the utilization of technological advances and devotes a major
portion of its capital expenditure program to keeping its manufacturing
machinery and equipment modern and efficient.
The total process includes spinning of yarn from cotton and blends of
cotton and man-made fibers such as polyester; fabrication of knit and woven
fabrics; dyeing, bleaching, screen printing and otherwise finishing those
fabrics; and manufacturing finished apparel in various cutting and sewing
operations. These operations are discussed below:
Yarn Manufacturing - The spinning of yarns, the process by which fibers
of raw cotton and blends of cotton and man-made fibers are converted into
continuous strands, is a key operation in the manufacturing process. Yarn
uniformity and strength are the principal characteristics which materially
affect the efficiency of subsequent manufacturing processes and the quality of
the finished fabrics or apparel. The Company manufactures a variety of yarn
sizes for various end uses.
The Company purchases synthetic fibers from one principal supplier.
There are approximately four major producers of such fibers in the United
States. The Company purchases cotton, primarily grown in the Southeastern
region, from various cotton merchants. The Company also purchases all of its
requirements of filament and textured yarns from other manufacturers. The
Company has experienced no material difficulty in purchasing adequate supplies,
and does not presently anticipate any difficulties in the future. The Company
has no long-term contracts for the supply of raw materials and is, therefore,
subject to market price fluctuations.
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Fabrication - The yarns described above are converted by the Company
into cloth or fabrics through the processes of single knitting, supplemented by
smaller operations of weaving, double knitting and warp knitting. These
operations are conducted in four plant locations in Alexander City.
Fabrication facilities for Cross Creek are located in Mt. Airy, North Carolina.
Similar fabrication facilities in Livingston, Scotland, service Russell Corp.
UK Limited.
Dyeing and Finishing - Fabrics described above are either used in the
production of the Company's own apparel or sold to others. These fabrics are
dyed and finished in company-owned facilities in Alexander City and Sylacauga,
Alabama; Mt. Airy, North Carolina; and Livingston, Scotland. Yarn-dyed fabrics
are dyed in the yarn manufacturing stage. The dyeing and finishing processes
impart and affect the appearance, the hand (feel), colorfastness, uniformity,
shade, and stability (retention of shape and form) of the fabric.
Cutting and Sewing - The Company's cutting and sewing operations are
currently located in 30 plants in the U.S. and two plants in Scotland which
serve its apparel marketing operations. The Company employs an engineering
staff to assist in the design and development of new equipment to improve
efficiencies and automate production facilities in the cutting and sewing
operations which historically have been characterized by high labor costs.
The Company places a major emphasis upon maintaining sufficient modern
cutting and sewing equipment, thereby providing flexibility to accommodate
changing patterns, styles and designs of its apparel products.
MARKETING
Athletic Division - RUSSELL ATHLETIC produces and markets high-quality
teamwear and knit activewear through distribution partners including sporting
goods dealers, specialty stores, department stores, sporting goods chains,
college bookstores, and major mail-order catalogs. Sales are made by Company
employees.
The Company has a dominant position as a supplier of team uniforms, providing
practice and game uniforms for both professional and amateur participants of
almost every major sport. Russell is the "official" supplier of team uniforms
for 24 of 28 Major League Baseball teams and outfits more NFL teams than any
other company. The Company believes it is the largest manufacturer of athletic
uniforms in the United States.
Activewear such as sweatshirts, sweatpants, T-shirts, and tank tops are also
sold under the RUSSELL ATHLETIC label. The Company merchandises the RUSSELL
ATHLETIC line in product categories such as NuBlend, HIGH COTTON, and PRO
COTTON.
RUSSELL ATHLETIC is a leading producer and marketer of quality licensed sports
apparel, selling its products under licenses granted by Major League Baseball,
the National Football League and most major colleges and universities. The
Company has the exclusive rights to market authentic game jerseys under Major
League Baseball Properties' Authentic Diamond Collection.
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The Company furnishes most of its own yarn and fabric used in this division and
also supplements its requirements with purchases from outside suppliers. The
uniforms are manufactured in a wide variety of styles, fabrics and colors, with
lettering and numerical arrangements available to customers' specifications.
Knit Apparel Division - Under the JERZEES label and private labels,
this division designs and markets a wide variety of knitted apparel, including
fleece sportswear, such as sweatshirts and sweatpants, and lightweight
sportswear, such as T-shirts and tank tops for children and adults. The Company
signed an exclusive licensing agreement in 1993 to introduce a line of women's
and girls' activewear under the chic(R) brand name in the United States.
The apparel is sold by a salaried, company-employed salesforce to distributors,
screen printers, mass merchandising chains, and other retail outlets. The
Division maintains sales offices in Alexander City, Alabama; New York, New
York; Irving, Texas; Norcross, Georgia; and Irvine, California.
Fabrics Division - The Fabrics Division designs and markets quality
woven fabrics of cotton and blends of cotton and man-made fibers in a wide
variety of patterns, colors and constructions for sale primarily to other
manufacturers of apparel. Most of the woven fabrics are made with dyed yarns
to produce fabrics to meet customer specifications. A fabric screen printing
operation also permits color printing of woven fabrics, thereby providing a
more diversified product line. Sales are made by the Company's own marketing
staff from its Alexander City, Atlanta, Los Angeles, and New York sales offices
and also by commission sales representatives located in Dallas, New York and
Toronto.
The Division's expertise in finishing plain-woven fabrics is also
utilized in a contract finishing operation where customer-owned fabrics are
finished, or printed and finished, on a contractual basis.
Cross Creek Apparel, Inc. - Cross Creek designs and markets better knit
apparel including placket shirts, turtlenecks and rugbys. The CROSS CREEK PRO
COLLECTION, designed specifically for golfers, is sold in golf pro shops and
resort areas. The CROSS CREEK retail line is distributed through department
stores and men's specialty shops. The CROSS CREEK COUNTRY COTTONS line of
placket shirts is marketed through national distributors to screen printers and
embroiderers. CROSS CREEK also manufactures private label apparel for high-end
catalogs and other retailers. In addition to commission agents, Cross Creek
maintains a company-employed sales force with offices in Mt. Airy, North
Carolina and New York, New York.
Russell Corp. UK Limited - Russell Corp. UK Limited is a vertical
operation (starting with purchased yarn) which manufactures and markets fleece
garments and T-shirts for sale primarily in the United Kingdom, and also
throughout Europe. These products are similar to those produced by the Company
in the U.S.
The Game Inc. - The Game Inc. became a wholly owned subsidiary of
Russell Corporation on December 23, 1993. Located in Midland, Georgia, THE
GAME is a wholesale distributor of high-quality, licensed collegiate and
professional caps and apparel. THE GAME is a licensee of the National
Basketball Association, the
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National Football League, Major League Baseball, the National Hockey League,
World Cup Soccer, the National Collegiate Athletic Association, and the
Olympics. In addition, THE GAME produces licensed goods bearing the logo of
more than 100 U.S. colleges and universities.
These products are sold through national sales representatives to retailers
across the nation. Distribution channels include specialty footwear stores,
department stores, superstores, licensed product specialty stores, full-line
sporting goods stores, bookstores, concessionaires, and souvenir and gift
stores.
Other - The Company also has sales offices in Alicante, Spain;
Brussels, Belgium; Frankfurt, Germany; Mexico City, Mexico; Paris, France;
Prague, Czechoslovakia; and Prato, Italy.
COMPETITION
The textile-apparel industry is keenly competitive, and the Company has
many domestic and foreign competitors, both large textile-apparel companies and
smaller concerns. While the sales of a number of manufacturers are
substantially greater than those of the Company, no single manufacturer
dominates the industry.
EMPLOYEES
As of January 1, 1994, the Company had 16,640 employees. The Company
has never had a strike or work stoppage and considers its relationship with its
employees to be good.
REGULATION
The Company is subject to Federal, State, and local laws and
regulations affecting its business, including those promulgated under the
Occupational Safety and Health Act (OSHA), the Consumer Product Safety Act
(CPSA), the Flammable Fabrics Act, the Textile Fiber Product Identification
Act, and the rules and regulations of the Consumer Products Safety Commission
(CPSC). The Company believes that it is in substantial compliance with all
applicable governmental regulations under these statutes. The Company has
complied with all known current environmental requirements and expects no major
additional expenditures in this area in the foreseeable future.
PROPOSED ACQUISITION
Subsequent to year-end 1993, Russell Corporation announced the signing
of a definitive agreement for the acquisition of DeSoto Mills, Inc., a
finisher/manufacturer of popularly priced socks for men, women and children.
This
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stock transaction, valued at approximately $10,000,000, will result in DeSoto
Mills, Inc. being operated as a wholly owned subsidiary of Russell Corporation.
The acquisition is scheduled to close on April 1, 1994.
Located in Ft. Payne, Alabama, Desoto Mills sells sports and casual
socks under the brand names of DeSoto Players Club, Athletic Club, Performance
Club, and Player Performance. Socks are also sold to private label customers
and under licensing agreements such as Faded Glory, Beverly Hills Polo Club and
Hytest. Sales are made through a Company-employed sales force principally to
the wholesale club market and to discount retailers.
ITEM 2. Properties
The Company's principal executive offices, manufacturing plants and
research facilities are located in Alexander City, Alabama, with additional
plants in Alabama, Florida, Georgia, Nevada, North Carolina, Virginia and (in
and around) Livingston, Scotland. The Company has no material mortgages on any
of its real property or manufacturing machinery except for capitalized lease
obligations (see Note 3 of Notes to Consolidated Financial Statements), and
believes that all of its properties are well maintained and suitable for its
operations and are currently fully utilized for such purposes.
The Company utilizes an aggregate of approximately 8,750,000 square
feet of manufacturing, warehousing and office facilities. The following table
summarizes the approximate areas of such facilities:
Approximate
Primary Use Square Feet
----------- -----------
Spinning 1,552,500
Knitting and Weaving 777,700
Dyeing and Finishing 690,700
Cutting and Sewing 2,012,600
Warehousing and Shipping 2,669,300
Retail/Outlet Stores 118,600
Executive Offices, Maintenance
Shops and Research and
Development 513,400
Scotland 380,100
Mexico 35,100
All presently utilized facilities in the U.S. are owned,
except the Montgomery and Greenville, Alabama, sewing plants; Columbus,
Georgia and Sparks, Nevada distribution facilities; several regional
warehouses; the regional sales offices; and the majority of the outlet/retail
store locations (see Notes 3 and 9 of Notes to Consolidated Financial
Statements).
ITEM 3. Legal Proceedings
The Company is a party to various lawsuits arising out of the conduct of
its business, none of which, if adversely determined, would have a material
adverse affect upon the Company.
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ITEM 4. Submission of Matters to a Vote of Security Holders
None
EXECUTIVE OFFICERS OF THE COMPANY
"Election of Directors" on pages one through four of the Proxy
Statement for the Annual Meeting of Shareholders to be held April 27, 1994 is
incorporated herein by reference.
Additional executive officers who are not directors are as follows:
Officer
Name Age Since Position
---- --- ------- --------
Fred O. Braswell III 38 1992 Vice President-External
Affairs
Steve R. Forehand 38 1987 Secretary
Thomas R. Johnson, Jr. 51 1989 Executive Vice President-
Manufacturing
J. Anthony Meyer, Jr. 44 1991 Treasurer
W. J. Spires, Jr. 48 1988 President - Cross Creek
Apparel, Inc.
JT Taunton, Jr. 51 1983 Executive Vice President-
Sales and Marketing
Larry E. Workman 50 1987 Controller
Mr. Braswell, employed by the Company in 1992, was Director of the
Alabama Development Office from 1990 until 1992. Prior to 1990, he was Director
of the Alabama Department of Economic and Community Affairs.
Mr. Forehand, employed by the Company in 1985 as Director of Taxes,
served as Assistant Secretary from 1987 to 1988. Prior to joining the Company,
he was engaged in the private practice of law.
Mr. Johnson, employed by the Company since 1989, most recently served
as Vice President, Greige Manufacturing. Prior to joining Russell, he served
as Operations Manager for Eden Yarns, Inc. from 1987 to 1989 and as a Plant
Manager for Avondale Mills from 1984 to 1987. Prior to that, Mr. Johnson was
employed by Chicopee, a division of Johnson & Johnson.
Mr. Meyer, employed by the Company in 1991, was associated with Wachovia
Bank of Georgia from 1979 to 1991 where he was a Senior Vice President. He was
Southern District Manager, Corporate Banking, from 1981 to 1991.
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Mr. Spires, employed by the Company in 1969, was elected President,
Cross Creek Apparel, Inc. in 1993. Prior to that, he served from 1988 to 1993
as Vice President, Services, where he directed the Company's Distribution,
Transportation and Information Services activities. Prior to 1988, Mr. Spires
held several management positions with Russell in both sales and operations.
Mr. Taunton, employed by the Company since 1973, most recently served
as President of the Fabrics Division from 1988 to 1993. Prior to that, he
served as Vice President, Operations and as Operations Manager for the Fabrics
Division.
Mr. Workman, employed by the Company since 1969 as an accountant,
served as Manager of Cost Accounting from 1970 to 1987.
All executive officers and all other officers of the Company are
elected by the Board of Directors and serve at the pleasure of the Board of
Directors.
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PART II
ITEM 5. Market for the Registrant's Common
Stock and Related Security Holder Matters
"Dividend and Market Price Information" on page 27 and in Note 3 to
Consolidated Financial Statements on page 23 of the Annual Shareholders Report
for the year ended January 1, 1994 are incorporated herein by reference.
The approximate number of holders of the Company's common stock at March
9, 1994 was 13,000.
ITEM 6. Selected Financial Data
"Financial Review" on pages 30 and 31 of the Annual Shareholders Report
for the year ended January 1, 1994 is incorporated herein by reference.
ITEM 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations
"Management's Discussion and Analysis of Financial Condition and Results
of Operations" on pages 28 and 29 of the Annual Shareholders Report for the
year ended January 1, 1994 is incorporated herein by reference.
ITEM 8. Financial Statements and Supplementary Data
The following consolidated financial statements of the registrant and its
subsidiaries, included in the Annual Shareholders Report for the year ended
January 1, 1994 are incorporated herein by reference:
... Consolidated statements of income - Years ended January 1, 1994,
January 2, 1993 and January 4, 1992
... Consolidated balance sheets - January 1, 1994 and January 2, 1993
... Consolidated statements of stockholders' equity - Years ended
January 1, 1994, January 2, 1993 and January 4, 1992
... Consolidated statements of cash flows - Years ended January 1, 1994,
January 2, 1993 and January 4, 1992
... Notes to consolidated financial statements - Years ended January 1,
1994, January 2, 1993 and January 4, 1992
... Report of Independent Auditors
ITEM 9. Changes in and Disagreements with
Accountants on Accounting and Financial Disclosure
None
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PART III
ITEM 10. Directors and Executive Officers of the Registrant
"Election of Directors" on pages one through four and "Principal
Shareholders" on pages eleven and twelve of the Proxy Statement for the Annual
Meeting of Shareholders to be held April 27, 1994 is incorporated herein by
reference.
"Executive Officers of the Company" on pages I-7 and I-8 of this report is
incorporated herein by reference.
Other significant employees are as follows:
Officer
Name Age Since Position
---- --- ----- --------
Fletcher D. Adamson 59 1987 Vice President-Research
William P. Dickson, Jr. 53 1974 Vice President-
Human Resources
J. Franklin Foy 58 1982 Vice President-
Dyeing and Finishing
John E. Frechette 54 1991 Vice President-
International
Jerry W. Green 50 1990 Vice President-
Apparel Operations
K. Roger Holliday 35 1988 President-Knit Apparel
Division
D.W. Wachtel 55 1991 President-Athletic Division
Mr. Adamson, employed by the Company since 1955, was Director, Machine
Research and Development from 1969 to 1987. He began his career in the cutting
operation for the Athletic Division and was a Supervisor in the division's
sewing operations from 1960 to 1969.
Mr. Dickson, employed by the Company in 1974, was previously Industrial
Relations Manager for the Bibb Company.
Mr. Foy, employed by the Company since 1959, was Operating Vice
President, Dyeing and Finishing prior to 1982.
Mr. Frechette, employed by the Company in 1991, operated J.F. &
Associates from 1986 to 1991. J.F. & Associates provided general management
and marketing consulting with focus on the apparel industry. Prior to 1986, he
was employed by Levi Strauss & Company for 15 years, most recently, as Vice
President and General Manager of the Jeans Division U.S.A.
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Mr. Green, employed by the Company since 1969, has held various
management positions in the apparel operations of the Company. Most recently,
he served as Operating Vice President, Apparel Manufacturing from 1986 to 1990.
Mr. Holliday, employed by the Company since 1986, was promoted to
President of the Knit Apparel Division in 1991. He served as Assistant
Treasurer from 1988 to 1991 and as Director of Financial Relations from 1986 to
1988. Prior to joining the Company, he was employed by Johnson & Higgins from
1980 to 1986.
Mr. Wachtel, employed by the Company in 1976, was promoted to President
of the Athletic Division in 1991. He formed the Mid-South Regional Office in
1980 and formed the Mid-Southeast Sales Office in 1986. He was General Manager
of Russell Athletic, Inc. in Snellville, Georgia from 1989 to 1990 and Vice
President, Sales in the Athletic Division from 1990 to 1991.
"Compliance with Section 16(a) of the Securities Exchange Act of 1934"
on page 13 of the Proxy Statement for the Annual Meeting of Shareholders to be
held April 27, 1994 is incorporated herein by reference.
ITEM 11. Executive Compensation
"Executive Compensation" on pages four through ten of the Proxy
Statement for the Annual Meeting of Shareholders to be held April 27, 1994 is
incorporated herein by reference.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management
(a) "Principal Shareholders" on pages eleven and twelve of the Proxy
Statement for the Annual Meeting of Shareholders to be held April 27, 1994 is
incorporated herein by reference.
(b) Information concerning security ownership of management set forth
in the Proxy Statement for the Annual Meeting of Shareholders to be held April
27, 1994 under the captions "Security Ownership of Management" on page twelve
is incorporated herein by reference.
(c) There are no arrangements known to the registrant the operation of
which may at a subsequent date result in a change in control of the registrant.
ITEM 13. Certain Relationships and Related Transactions
"Transactions with Management and Others" on page thirteen of the Proxy
Statement for the Annual Meeting of Shareholders to be held April 27, 1994 is
incorporated herein by reference.
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PART IV
ITEM 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) List of Documents filed as part of this Report:
(1) Financial Statements
All financial statements of the registrant as
set forth under Item 8 of this Report on Form
10-K
(2) Financial Statement Schedules
Schedule Page
Number Description Number
-------- ----------- ------
V Property, Plant and Equipment IV-4
VI Accumulated Depreciation,
Depletion and Amortization
of Property, Plant and
Equipment IV-5
VIII Valuation and Qualifying
Accounts IV-6
IX Short-term Borrowings IV-7
X Supplementary Income Statement
Information IV-8
All other financial statements and schedules not listed
have been omitted since the required information is included
in the consolidated financial statements or the notes
thereto, or is not applicable or required.
(3) Exhibits (numbered in accordance with Item 601 of
Regulation S-K)
Page Number or
Exhibit Incorporation
Numbers Description by Reference to
------- ----------- ---------------
(3a) Restated Articles of Exhibit (3a) to
Incorporation Annual Report
on Form 10-K
for year ended
December 31,
1988
(3b) Certificate of Adoption Exhibit (3b)
of Resolutions by Board to Annual Report on
of Directors of Russell Form 10-K for year
Corporation dated ended December 29, 1990.
October 25, 1989
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Page Number or
Exhibit Incorporation
Numbers Description by Reference to
- - - - - - - - - ------- ----------- ---------------
(3c) Bylaws Exhibit (3b) to
Annual Report
on Form 10-K
for year ended
December 31,
1988
( 4) Rights Agreement dated Exhibit 1 to
October 25, 1989 between Form 8-A dated
the Company and First October 30,
Alabama Bank, Montgomery, 1989 Registra-
Alabama tion Statement
No. 1-5822
(10a) Form of Deferred Exhibits 19(a)
Compensation Agreement and 19(b) to
with certain officers Quarterly
Report on
Form 10-Q for
Quarter ended
July 3, 1988
(10b) Fuel supply contract Exhibit 13(c)
with Russell Lands, to Registration
Incorporated dated Statement
May 21, 1975 No. 2-33943
(10c) 1978 Stock Option Plan Exhibit 1 to
Registration
Statement
No. 2-64496
(10d) October 28, 1981 Exhibit 10(i)
Amendment to Stock to Annual Report
Option Plans on Form 10-K
for year ended
January 2, 1988
(10e) 1987 Stock Option Plan Exhibit 1 to
Registration
Statement
No. 33-24898
(10f) 1993 Executive Long-Term Exhibit 4(c) to
Incentive Plan Registration
Statement
No. 33-69679
(11) Computations of Earnings IV-11
per Common Share
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Page Number or
Exhibit Incorporation
Numbers Description by Reference to
- - - - - - - - - ------- ----------- ---------------
(13) 1993 Annual Report to IV-12
Shareholders
(21) List of Significant IV-13
Subsidiaries
(23) Consent of Independent IV-14
Auditors
(99) Proxy Statement for IV-15
April 27, 1994
(b) Reports on Form 8-K
No reports on form 8-K were filed during the fourth
quarter of the year ended January 1, 1994.
For the purpose of complying with the amendments to the rules governing
Form S-8 (effective July 13, 1990) under the Securities Act of 1933, the
undersigned registrant hereby undertakes as follows, which undertaking shall be
incorporated by reference into the undertakings contained in Part II of the
registrant's registration statements on Form S-8 numbers 2-64496 and 33-24898:
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant
to the foregoing provisions, or otherwise, the registrant has
been advised that, in the opinion of the Securities and
Exchange Commission, such indemnification is against public
policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in successful
defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection
with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed
in the Act and will be governed by the final adjudication of
such issue.
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SCHEDULE V--PROPERTY, PLANT AND EQUIPMENT
RUSSELL CORPORATION AND SUBSIDIARIES
- - - - - - - - - ------------------------------------------------------------------------------------------------------------------------------
BALANCE AT BALANCE
BEGINNING ADDITIONS ACQUISITIONS AT END
CLASSIFICATION OF PERIOD AT COST (1) AND OTHER (2) RETIREMENTS OF PERIOD
- - - - - - - - - ------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED JANUARY 1, 1994
Land $ 4,632,352 $ 65,665 $ 242,262 $ -0- $ 4,940,279
Buildings 199,819,245 26,240,985 4,781,021 291,717 230,549,534
Machinery and equipment 628,262,887 76,026,214 (34,420,788) 18,586,235 651,282,078
Construction in progress 29,558,515 (18,353,678)(3) 143,667 -0- 11,348,504
------------ ------------ ------------ ----------- ------------
TOTALS $862,272,999 $ 83,979,186 $(29,253,838) $18,877,952 $898,120,395
============ ============ ============ =========== ============
YEAR ENDED JANUARY 2, 1993
Land $ 2,593,311 $ 2,057,541 $ -0- $ 18,500 $ 4,632,352
Buildings 173,661,175 27,425,568 ( 1,059,739) 207,759 199,819,245
Machinery and equipment 546,629,604 96,847,274 ( 1,103,376) 14,110,615 628,262,887
Construction in progress 46,727,823 (17,169,308)(3) -0- -0- 29,558,515
------------ ------------ ------------ ----------- ------------
TOTALS $769,611,913 $109,161,075 $( 2,163,115) $14,336,874 $862,272,999
============ ============ ============ =========== ============
YEAR ENDED JANUARY 4, 1992
Land $ 3,223,368 $ -0- $ -0- $ 630,057 $ 2,593,311
Buildings 151,716,975 22,786,357 ( 157,565) 684,592 173,661,175
Machinery and equipment 504,747,066 52,096,607 ( 441,329) 9,772,740 546,629,604
Construction in progress 32,118,483 14,609,340 (3) -0- -0- 46,727,823
------------ ------------ ------------ ----------- ------------
TOTALS $691,805,892 $ 89,492,304 $( 598,894) $11,087,389 $769,611,913
============ ============ ============ =========== ============
(1) Additions consist of expansion throughout the vertical operation.
(2) 1993 includes $6,078,883 relating to an acquisition, ($562,187) arising
from the translation of currency statements, ($40,150,180) relating to a
write-down of assets and $5,379,646 from basis adjustments arising from
the adoption of FAS 109. 1992 includes $2,046,154 relating to an
acquisition and ($4,209,269) arising from the translation of foreign
currency statements. 1991 amounts are the effects of translating foreign
currency statements.
(3) Net of transfers from construction in progress to the appropriate building
or machinery and equipment account.
IV-4
18
SCHEDULE VI--ACCUMULATED DEPRECIATION, DEPLETION AND
AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
RUSSELL CORPORATION AND SUBSIDIARIES
- - - - - - - - - --------------------------------------------------------------------------------------------------------------------------------
BALANCE AT ADDITIONS BALANCE
BEGINNING CHARGED TO COSTS ACQUISITIONS AT END
CLASSIFICATION OF PERIOD AND EXPENSES (1) AND OTHER (2) RETIREMENTS OF PERIOD
- - - - - - - - - --------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED JANUARY 1, 1994
Buildings $ 43,911,329 $ 7,591,011 $ 1,118,312 $ 144,909 $ 52,475,743
Machinery and equipment 319,581,937 57,738,102 (10,254,632) 12,306,594 354,758,813
------------ ----------- ------------ ----------- ------------
TOTALS $363,493,266 $65,329,113 $ (9,136,320) $12,451,503 $407,234,556
YEAR ENDED JANUARY 2, 1993
Buildings $ 36,101,502 $ 8,009,304 $ (50,250) $ 149,227 $ 43,911,329
Machinery and equipment 278,374,264 51,681,719 269,045 10,743,091 319,581,937
------------ ----------- ------------ ----------- ------------
TOTALS $314,475,766 $59,691,023 $ 218,795 $10,892,318 $363,493,266
YEAR ENDED JANUARY 4, 1992
Buildings $ 31,976,168 $ 4,126,692 $ (1,358) $ -0- $ 36,101,502
Machinery and equipment 236,574,458 51,287,855 (133,193) 9,354,856 278,374,264
------------ ----------- ------------ ----------- ------------
TOTALS $268,550,626 $55,414,547 $ (134,551) $ 9,354,856 $314,475,766
============ =========== ============ =========== ============
(1) The annual provisions for depreciation have been computed in accordance
with the following ranges of rates:
Buildings 25 to 40 years
Machinery and equipment 6 to 25 years
(2) 1993 includes $2,269,634 relating to an acquisition, ($185,910) arising
from the translation of currency statements, ($12,582,063) relating to
a write-down of assets and $1,362,019 from basis adjustments arising
from the adoption of FAS 109.
1992 includes $1,718,843 relating to an acquisition and ($1,500,048)
arising from the translation of foreign currency statements.
1991 amounts are the effects of translating foreign currency statements.
IV-5
19
SCHEDULE VIII--VALUATION AND QUALIFYING ACCOUNTS
RUSSELL CORPORATION AND SUBSIDIARIES
- - - - - - - - - ----------------------------------------------------------------------------------------------------------------------------
BALANCE AT ADDITIONS BALANCE
BEGINNING CHARGED TO COSTS AT END
DESCRIPTION OF PERIOD AND EXPENSES ACQUISITION DEDUCTIONS OF PERIOD
- - - - - - - - - ----------------------------------------------------------------------------------------------------------------------------
YEAR ENDED JANUARY 1, 1994
Allowance for doubtful accounts $5,579,113 $ 7,852,497 $ 779,198 $ 5,723,524 (1) $ 8,487,284
Reserve for cash discounts 2,548,190 14,912,255 170,274 14,996,320 (2) 2,634,399
---------- ----------- ---------- ----------- -----------
TOTALS $8,127,303 $22,764,752 $ 949,472 $20,719,844 $11,121,683
========== =========== ========== =========== ===========
YEAR ENDED JANUARY 2, 1993
Allowance for doubtful accounts $5,239,488 $ 4,086,251 $ -0- $ 3,746,626 (1) $ 5,579,113
Reserve for cash discounts 1,821,809 13,441,653 -0- 12,715,272 (2) 2,548,190
---------- ----------- ---------- ----------- -----------
TOTALS $7,061,297 $17,527,904 $ -0- $16,461,898 $ 8,127,303
========== =========== ========== =========== ===========
JANUARY 4, 1992
Allowance for doubtful accounts $3,815,672 $ 6,067,096 $ -0- $ 4,643,280 (1) $ 5,239,488
Reserve for cash discounts 1,466,299 11,444,930 -0- 11,089,420 (2) 1,821,809
Advertising allowances 13,443 -0- -0- 13,443 (3) -0-
---------- ----------- ---------- ----------- -----------
TOTALS $5,295,414 $17,512,026 $ -0- $15,746,143 $ 7,061,297
========== =========== ========== =========== ===========
(1) Uncollectible accounts written off, net of recoveries.
(2) Discounts taken by customers during the year.
(3) Allowances taken by customers during the year.
IV-6
20
SCHEDULE IX--SHORT-TERM BORROWINGS
RUSSELL CORPORATION AND SUBSIDIARIES
- - - - - - - - - ------------------------------------------------------------------------------------------------------------------------------------
WEIGHTED MAXIMUM AMOUNT AVERAGE AMOUNT WEIGHTED AVERAGE
AVERAGE OUTSTANDING OUTSTANDING INTEREST RATE
BALANCE AT INTEREST DURING THE DURING THE DURING THE
CLASSIFICATION END OF PERIOD RATE PERIOD PERIOD (2) PERIOD (3)
- - - - - - - - - ------------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED JANUARY 1, 1994
Notes payable $ 4,562,010 9.15% $ 4,962,009 $ 4,958,722 9.15%
Notes payable to banks (1) $77,146,992 3.86% $161,600,000 $105,909,259 3.50%
Commercial Paper (4) $ -0- N/A $ 12,880,000 $ 752,138 2.63%
YEAR ENDED JANUARY 2, 1993
Notes payable $ 4,962,009 9.15% $ 6,684,796 $ 6,004,838 9.15%
Notes payable to banks (1) $37,050,000 3.70% $140,900,000 $ 67,415,000 3.66%
Commercial Paper (4) $12,880,000 4.08% $ 50,000,000 $ 46,906,667 3.82%
YEAR ENDED JANUARY 4, 1992
Notes payable $ 6,684,796 9.15% $ 6,684,796 $ 6,684,796 9.15%
Notes payable to banks (1) $ 482,489 11.63% $ 63,300,000 $ 24,690,663 7.32%
(1) Notes payable to banks generally represent borrowings under lines of
credit borrowing arrangements which have no termination date.
(2) The average amount outstanding was computed by taking a weighted daily
average of amounts outstanding throughout the year.
(3) The weighted average interest rate was computed by dividing the actual
interest expense by the average short-term debt outstanding.
(4) Commercial Paper was classified as long-term prior to 1992.
IV-7
21
SCHEDULE X--SUPPLEMENTARY INCOME STATEMENT INFORMATION
RUSSELL CORPORATION AND SUBSIDIARIES
- - - - - - - - - --------------------------------------------------------------------------------
ITEM CHARGED TO COSTS AND EXPENSES
- - - - - - - - - --------------------------------------------------------------------------------
Year Ended
----------------------------------------------------
January 1, 1994 January 2, 1993 January 4, 1992
--------------- --------------- ----------------
Maintenance and repairs $27,419,376 $29,507,672 $22,465,058
Advertising costs $33,930,388 $24,720,982 $20,029,372
Charges to costs and expenses for depreciation and amortization of intangible
assets, preoperating costs and similar deferrals, taxes other than income and
payroll, and royalties for the above years are not presented as such amounts
are less than one percent of total sales and revenues.
IV-8
22
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunder duly authorized.
RUSSELL CORPORATION
(Registrant)
Date 3/29/94 By /s/ John C. Adams
---------------------------
John C. Adams
Chairman, President and CEO
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report is signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
/s/ John C. Adams Chairman, President and CEO 3/29/94
---------------- -------
John C. Adams Date
Executive Vice President and
Chief Financial Officer, and
Director (Principal Financial
/s/ James D. Nabors Officer) 3/29/94
----------------- -------
James D. Nabors Date
----------------- Director -------
Herschel M. Bloom Date
/s/ Ronald G. Bruno Director 3/29/94
--------------- -------
Ronald G. Bruno Date
/s/ H. Scott Howell Director 3/29/94
--------------- -------
H. Scott Howell Date
--------------- Director -------
Glenn Ireland II Date
IV-9
23
----------------------- Director -------
Crawford T. Johnson III Date
/S/ C. V. Nalley III Director 3/29/94
----------------------- -------
C. V. Nalley III Date
/S/ Benjamin Russell Director 3/29/94
----------------------- -------
Benjamin Russell Date
----------------------- Director -------
John R. Thomas Date
/S/ John A. White Director 3/29/94
----------------------- -------
John A. White Date
/S/ Larry E. Workman Controller 3/29/94
----------------------- (Principal Accounting Officer) -------
Larry E. Workman Date
IV-10