HanesBrands Initiates First Half of Planned $300 Million Reduction of Long-Term Debt in 2012
HanesBrands, based in Winston-Salem, N.C., announced today that it intends to redeem in July $150 million of its Floating Rate Senior Notes due 2014 as part of plans to pay off its approximately $300 million of floating-rate bond debt in 2012.
The redemption of the Floating Rate Notes is consistent with Hanes' plans to use free cash flow in 2012 and 2013 to significantly reduce long-term debt and leverage.
"Free cash flow is tracking to our plans, and we are taking the opportunity to begin the reduction of floating-rate debt a little earlier than originally planned this year," said Richard D. Moss, chief financial officer for HanesBrands. "We are using our strong capital structure and operating results to deleverage our balance sheet consistent with our strong free cash flow."
HanesBrands has issued a notice of redemption pursuant to the indenture for the Floating Rate Notes due 2014, stating that it intends to redeem $150 million aggregate principal amount of the Floating Rate Notes on July 12, 2012, at a redemption price equal to 100 percent of the principal amount of the Notes, including interest accrued and unpaid to the redemption date. Following the redemption date, up to $147,055,000 aggregate principal amount of Floating Rate Notes will remain outstanding.
In May, the company announced that it would remove itself from the private label industry and sell off the European branch of its imagewear market in order to improve cost control. HanesBrands said it would refocus its imagewear operations toward branded printwear, which includes the Hanes and Champion labels, expecting sales of approximately $150 million in 2013. In 2011, the company's outerwear business, which included Hanes Imagewear, saw a 9 percent decrease in sales. The company has not yet said what would happen with the Outer Banks unit, which it owns and expects to divest.
In addition to expectations to pay off the approximately $300 million in floating rate notes in 2012, the company's goal is to pay off its $500 million of 8 percent notes in 2013, reducing bond debt to approximately $1 billion.
For more information, visit www.hanesbrands.com.