For 2013, the company remains committed to prepaying all of its $500 million of 8 percent fixed rate notes and still believes that a reasonable estimate of EPS potential is in the low $3 range.
On May 30, Hanes sold its European imagewear business, and the company is completing the discontinuation of its private-label and Outer Banks domestic imagewear operations serving wholesalers that sell to the screen-print industry. In accordance with GAAP requirements, the company reported results for the second quarter on a continuing-operations basis and revised prior-period results to reflect continuing operations. The company’s branded printwear operations will continue to operate and serve the branded domestic screen-print market.
For the first half, discontinued operations had a loss per diluted share of $0.69 – a loss of $0.03 in the first quarter and a loss of $0.66 in the second quarter.In February when the company issued financial guidance for 2012, the company’s expectations for what are now discontinued operations were net sales of approximately $190 million, an operating loss of less than $1 million, and cash flow from operations of approximately $15 million. More information on discontinued operations and financial results for prior-period continuing operations is available in the investors section of the company’s corporate website, http://tiny.cc/HanesBrandsIR , and will be available in the company’s Form 10-Q filing for the second quarter. Note on Non-GAAP Terms and Definitions Free cash flow and EBITDA are not generally accepted accounting principle measures. Free cash flow is defined as cash from operations less net capital expenditures. Free cash flow may not be representative of the amount of residual cash flow that is available to the company for discretionary expenditures since it may not include deductions for mandatory debt-service requirements and other nondiscretionary expenditures. The company believes, however, that free cash flow is a useful measure of the cash-generating ability of the business relative to capital expenditures and financial performance. See Table 4 attached to this press release to reconcile free cash flow to the GAAP measure of net cash provided by operating activities.