Russell Offers Six-Point Plan To Return To Profitability

Russell Corp. projects$50 million in cost savings, and sales and earnings growth projected for 2002 through 2003. The company anticipates strong earnings growth in 2002 and 2003 as a result of its Six-Point Profit Growth Plan.

Russell estimates that earnings per share in 2002 will increase to $1.40 to $1.60 per share. "We are reaping the benefits of the three-year restructuring plan begun in 1998," said Jack Ward, COB/CEO. "Our efforts have successfully transformed Russell into a market-driven, low cost, globally focused company with strong market share growth. To capitalize on the successful restructuring, we are now implementing a Six-Point Profit Growth Plan that will generate additional cost savings of over $50 million annually by 2003. The plan also will substantially improve Russell's competitive position in the marketplace and enhance top-line growth by building upon Russell's leadership positions in the activewear, outdoor, and athletic-related products businesses."

The Six-Point Profit Growth Plan includes the following objectives:
1. Sales growth: Due to the effectiveness of marketing efforts, Russell has achieved more than $40 million in new business for 2002. With the continued industry consolidations, additional new business opportunities exist for the second half of 2002 and for 2003. Russell's market shares continue to grow in all major categories, and the company is now the second largest supplier to the imprintable market. Russell Athletic is forecasting revenue increases through a new national program of men's fleece in JCPenney; continued strong growth with sports specialty retailers; the rapid expansion of its college bookstore business; and increased emphasis on baseball licensed products and the uniform business. Additionally, Russell is growing with major
retail customers such as Kohl's and Wal-Mart.

2. Yarn savings: Russell is planning yarn savings of over $15 million in 2002 based on Frontier Spinning taking over the company's yarn operations and lower raw material prices.

3. Textile cost savings: During the next two years, the company forecasts savings of more than $20 million annually in lower costs through the elimination of excess capacity, the previously announced closing and restructuring of manufacturing facilities and expanded global procurement.

4. Organization savings: The elimination of over 200 salaried positions, including the consolidation of the Cross Creek Apparel division into Russell Artwear, will create more than $5 million in projected savings in 2002.

5. Distribution efficiencies - Reorganization of the Russell Athletic distribution center and the elimination of the Cross Creek distribution center are forecast to save more than $10 million annually. Most of those savings will occur in 2003.

6. Inventory management: Russell has implemented steps to achieve a 20% improvement in inventory turns by year end 2003. Significant resources have already been applied to this area during 2000-2001.

"Based on our current strong market positions and the Six-Point Profit Growth Plan, we are encouraged about Russell's prospects for the next two years despite the challenging economic environment," Ward added. "For 2002, we are conservatively forecasting sales growth of 3% to 5%, assuming the economy does not improve. An improved economy and stabilized or increased market pricing would help accelerate earnings growth. We also anticipate further earnings increases in 2003 as we continue to realize the results of the Six-Point Profit Growth Plan.''

Due to the wraparound effect of lower prices and the forecast for a continued weak market in the first half, earnings per share for the first two quarters of 2002 are expected to be below prior year ongoing results. Earnings per share for the first quarter are projected to be in the range of $.04 to $.08 and $.09 to $.13 for the second quarter. Earnings in the second half of the year are expected to strongly increase versus prior year ongoing earnings due to the benefits from the Six-Point Profit Growth Plan.

Partially offsetting the cost savings in 2002 are increased health and property insurance costs, higher interest expense, and performance-related compensation. The expected results for 2002 include the effect of the new Financial Accounting Standards Board's rule that will reduce costs for amortizing goodwill and other intangible assets. Russell's net income will increase by about $.03 per share under the new accounting rules.

In the fourth quarter 2001, ongoing earnings per share are still forecasted to be in the range of analysts' estimates ($.39 to $.44) despite softer than originally expected fleece sales due to the unseasonably warm weather across the U.S.

Management plans an open conference call on February 7, 2002, at 8:30 a.m. EST to discuss fourth quarter results. Details about the call will be found on the company's Investor Relations section of its website, www.russellcorp.com. Additionally, if you would like to receive press releases, conference call reminders and other notices, please register through the referenced website.