New-product Innovation Contributed To HanesBrands Sales Growth In The Third Quarter. Hanes' New ComfortBlend Men's Underwear Bottoms And T-shirts Use A Special Cotton-polyester Fiber Blend For A Softer Feel, Less Shrinkage And Quicker Drying. (Photo: Business Wire)

Cautionary Statement Concerning Forward-Looking Statements

Statements in this press release that are not statements of historical fact are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including those regarding our long-term goals and trends associated with our business, as well as guidance as to future performance. Examples of such statements include the statements included in this press release in the section titled 2012 Guidance. These and other forward-looking statements are made only as of the date of this press release and are based on our current intent, beliefs, plans and expectations. They involve risks and uncertainties that could cause actual future results, performance or developments to differ materially from those described in or implied by such forward-looking statements. These risks and uncertainties include the following: current economic conditions, including consumer spending levels and the price elasticity of our products; the impact of significant fluctuations and volatility in various input costs, such as cotton and oil-related materials, utilities, freight and wages; the highly competitive and evolving nature of the industry in which we compete; our ability to successfully manage social, political, economic, legal and other conditions affecting our domestic and foreign operations and supply-chain sources, such as political instability and acts of war or terrorism, natural disasters, disruption of markets, operational disruptions, changes in import and export laws, currency restrictions and currency exchange rate fluctuations; the impact of the loss of one or more of our suppliers of finished goods or raw materials; our ability to effectively manage our inventory and reduce inventory reserves; our ability to optimize our global supply chain; our ability to continue to effectively distribute our products through our distribution network; financial difficulties experienced by, or loss of or reduction in sales to, any of our top customers or groups of customers; gains and losses in the shelf space that our customers devote to our products; our ability to accurately forecast demand for our products; increasing pressure on margins; our ability to keep pace with changing consumer preferences; the impact of any inadequacy, interruption or failure with respect to our information technology or any data security breach; our ability to protect our reputation and brand images; our ability to protect our trademarks, copyrights and patents; our debt and debt service requirements that restrict our operating and financial flexibility and impose interest and financing costs; the financial ratios that our debt instruments require us to maintain; future financial performance, including availability, terms and deployment of capital; our ability to comply with environmental and occupational health and safety laws and regulations; costs and adverse publicity from violations of labor or environmental laws by us or our suppliers; and other risks identified from time to time in our most recent Securities and Exchange Commission reports, including our annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, registration statements, press releases and other communications, as well as in the investors section of our corporate website at http://tiny.cc/HanesBrandsIR. Except as required by law, the company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.

HanesBrands

HanesBrands is a socially responsible leading marketer of everyday basic apparel under some of the world’s strongest apparel brands, including Hanes, Champion, Playtex, Bali, JMS/Just My Size, barely there, Wonderbra and Gear for Sports. The company sells T-shirts, bras, panties, men’s underwear, children’s underwear, socks, hosiery, casualwear and activewear produced in the company’s low-cost global supply chain. Ranked No. 512 on the Fortune 1000 list, Hanes has approximately 53,300 employees in more than 25 countries and takes pride in its strong reputation for ethical business practices. Hanes is a U.S. Environmental Protection Agency Energy Star 2012 Sustained Excellence Award winner and 2010 and 2011 Partner of the Year. The company ranks No. 141 on Newsweek magazine’s list of Top 500 greenest U.S. companies. More information about the company and its corporate social responsibility initiatives, including environmental, social compliance and community improvement achievements, may be found on the Hanes corporate website at www.hanesbrands.com.

TABLE 1
HANESBRANDS INC.
Condensed Consolidated Statements of Income
(Amounts in thousands, except per-share amounts)
(Unaudited)
	Quarter Ended								Nine Months Ended
	September 29, 2012			October 1, 2011			% Change		September 29, 2012			October 1, 2011			% Change
Net sales	$	1,218,681		$	1,185,304		2.8%		$	3,372,465		$	3,333,340		1.2%
Cost of sales		818,751			771,251					2,350,489			2,168,305
Gross profit		399,930			414,053		-3.4%			1,021,976			1,165,035		-12.3%
As a % of net sales		32.8%			34.9%					30.3%			35.0%
Selling, general and
administrative expenses		243,422			269,109					734,872			792,177
As a % of net sales		20.0%			22.7%					21.8%			23.8%
Operating profit		156,508			144,944		8.0%			287,104			372,858		-23.0%
As a % of net sales		12.8%			12.2%					8.5%			11.2%
Other expenses		3,373			880					4,829			2,295
Interest expense, net		32,897			38,255					106,503			118,483
Income from continuing operations
before income tax expense		120,238			105,809					175,772			252,080
Income tax expense		9,055			20,739					21,544			48,283
Income from continuing operations		111,183			85,070		30.7%			154,228			203,797		-24.3%
Income (loss) from discontinued
operations, net of tax		(1,291)			5,762					(69,935)			21,926
Net income	$	109,892		$	90,832		21.0%		$	84,293		$	225,723		-62.7%
Earnings (loss) per share - basic:
Continuing operations	$	1.13		$	0.87		29.9%		$	1.56		$	2.09		-25.4%
Discontinued operations		(0.01)			0.06		NM			(0.71)			0.22		NM
Net income	$	1.11		$	0.93		19.4%		$	0.85		$	2.31		-63.2%
Earnings (loss) per share - diluted:
Continuing operations	$	1.11		$	0.85		30.6%		$	1.54		$	2.05		-24.9%
Discontinued operations		(0.01)			0.06		NM			(0.70)			0.22		NM
Net income	$	1.09		$	0.91		19.8%		$	0.84		$	2.28		-63.2%
Weighted average shares outstanding:
Basic		98,707			97,925					98,611			97,559
Diluted		100,472			99,535					100,131			99,200

TABLE 2
HANESBRANDS INC.
Supplemental Financial Information
(Dollars in thousands)
(Unaudited)
		Quarter Ended								Nine Months Ended
		September 29, 2012			October 1, 2011			% Change		September 29, 2012			October 1, 2011			% Change
Segment net sales¹:
Innerwear		$	574,278		$	558,422		2.8%		$	1,748,256		$	1,711,802		2.1%
Outerwear			413,033			392,683		5.2%			981,021			970,776		1.1%
Direct to Consumer			99,111			97,565		1.6%			278,396			277,819		0.2%
International			132,259			136,634		-3.2%			364,792			372,943		-2.2%
Total net sales		$	1,218,681		$	1,185,304		2.8%		$	3,372,465		$	3,333,340		1.2%
Segment operating profit¹:
Innerwear		$	96,841		$	88,372		9.6%		$	269,718		$	265,974		1.4%
Outerwear			46,339			48,379		-4.2%			24,118			94,265		-74.4%
Direct to Consumer			14,412			12,268		17.5%			24,773			21,955		12.8%
International			17,574			14,797		18.8%			33,964			43,275		-21.5%
General corporate expenses/other			(18,658)			(18,872)		-1.1%			(65,469)			(52,611)		24.4%
Total operating profit		$	156,508		$	144,944		8.0%		$	287,104		$	372,858		-23.0%
EBITDA²:
Net income from continuing operations		$	111,183		$	85,070				$	154,228		$	203,797
Interest expense, net			32,897			38,255					106,503			118,483
Income tax expense			9,055			20,739					21,544			48,283
Depreciation and amortization			23,047			21,972					69,313			65,185
Total EBITDA		$	176,182		$	166,036		6.1%		$	351,588		$	435,748		-19.3%
¹ As a result of the reduced size of sheer hosiery and changing trends, HanesBrands decided in the first quarter of 2012 to change its external segment reporting to include hosiery operations within the Innerwear segment. Hosiery had previously been reported as a separate segment. Prior-year segment sales and operating profit results, including other minor allocation changes, have been revised to conform to the current-year presentation. In addition, in May 2012, HanesBrands 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. As a result, the current year and prior-year segment disclosures do not reflect the sales and operating profit results of these discontinued businesses.
² Earnings from continuing operations before interest, taxes, depreciation and amortization is a non-GAAP financial measure.

TABLE 3
HANESBRANDS INC.
Condensed Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)
		September 29, 2012				December 31, 2011
Assets
Cash and cash equivalents		$	182,269			$	35,345
Trade accounts receivable, net			585,490				470,713
Inventories			1,340,776				1,607,555
Other current assets			210,319				217,178
Total current assets			2,318,854				2,330,791
Property, net			606,011				635,406
Intangible assets and goodwill			556,392				603,071
Other noncurrent assets			458,302				465,401
Total assets		$	3,939,559			$	4,034,669
Liabilities
Accounts payable and accrued liabilities		$	688,938			$	703,711
Notes payable			50,778				63,075
Accounts Receivable Securitization Facility			193,975				166,933
Current portion of long-term debt			145,185				-
Total current liabilities			1,078,876				933,719
Long-term debt			1,500,000				1,807,777
Other noncurrent liabilities			583,616				612,112
Total liabilities			3,162,492				3,353,608
Equity			777,067				681,061
Total liabilities and equity		$	3,939,559			$	4,034,669
TABLE 4
HANESBRANDS INC.
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
		Nine Months Ended
		September 29, 2012				October 1, 2011
Operating Activities:
Net income		$	84,293			$	225,723
Depreciation and amortization			70,096				66,568
Impairment of intangibles			37,425				-
Loss on disposition of business			31,811				-
Other noncash items			4,943				25,598
Changes in assets and liabilities, net			80,837				(344,763	)
Net cash provided by (used in) operating activities			309,405				(26,874	)
Investing Activities:
Capital expenditures			(29,162	)			(56,085	)
Acquisition of business			-				(9,154	)
Disposition of business			12,708				-
Net cash used in investing activities			(16,454	)			(65,239	)
Financing Activities:
Net borrowings (repayments) on notes payable, debt and other			(146,189	)			97,492
Effect of changes in foreign currency exchange rates on cash			162				(1,053	)
Increase in cash and cash equivalents			146,924				4,326
Cash and cash equivalents at beginning of year			35,345				43,671
Cash and cash equivalents at end of period		$	182,269			$	47,997
Supplemental cash flow information¹:
Net cash provided by (used in) operating activities		$	309,405			$	(26,874	)
Capital expenditures			(29,162	)			(56,085	)
Free cash flow		$	280,243			$	(82,959	)

¹ Free cash flow is a non-GAAP measure. For the quarter ended September 29, 2012, net cash provided by operating activities (GAAP) was $297 million and net capital expenditures were $10 million, resulting in non-GAAP free cash flow of $287 million. For 2012 guidance, net cash provided by operating activities (GAAP) is expected to be approximately $545 million and net capital expenditures are expected to be approximately $45 million, resulting in expectations for non-GAAP free cash flow of approximately $500 million.

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