Dec 11, 2009
Hanesbrands refinances debt, eyes acquisitions
Dec 11, 2009
Dec 10 (Reuters) - Innerwear maker Hanesbrands Inc (HBI.N) reaffirmed its 2010 sales growth view and said it refinanced its debt, giving it more flexibility to make bigger acquisitions.
Earlier financial covenants had restricted the company to make acquisitions limited to $100 million annually, which have now been raised to between $200 million and $300 million, the company said.
"Our new debt structure is simpler and gives us greater flexibility to execute multiple strategies for earnings growth," Chief Financial Officer Lee Wyatt said.
Winston-Salem, North Carolina-based Hanesbrands said it was aiming to cut its debt by $300 million in 2009 and 2010 each.
The company said net space gains resulting from newer distribution channels for its products were expected to add about $200 million, or 5 percent, to 2010 sales, independent of consumer spending levels.
Hanesbrands also sees its global supply chain boosting operating margins by 50 to 100 basis points, despite an expected uptick in commodity costs.
"We have the potential to sustain substantial growth momentum," Chief Financial Officer Lee Wyatt said.
The company, whose brands include Hanes, Champion, Playtex and Wonderbra, had announced its intention to refinance a portion of its existing debt through financing transactions, including a debt offering in November. Hanesbrands said it will also be able to return cash to its shareholders through share buybacks or dividends as per its new debt structure.
Shares of the company were trading flat at $25.08 Thursday 10 December in after-market trade on the New York Stock Exchange.
For the alerts, double-click (Reporting by Shradhha Sharma in Bangalore; Editing by Anil D'Silva)
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