Mcrae (AMEX:MRI.A)
Historical Stock Chart
From Jun 2019 to Jun 2024
McRae Industries, Inc. Announces Completion of Review of
Financial Statements for the Fiscal Year Ended July 31, 2004 and Earnings
Report for the First Quarter of Fiscal 2005 Ended October 30, 2004
MOUNT GILEAD, N.C., Dec. 23 /PRNewswire-FirstCall/ -- McRae Industries, Inc.
(Amex: MRIA; MRIB) announced today that it had completed its review of its
financial statements for the fiscal year ended July 31, 2004 and had amended
its Annual Report on Form 10-K for the fiscal year ended July 31, 2004
previously filed with the Securities and Exchange Commission to restate its
fiscal 2004 financial statements. The company previously announced that it was
conducting a review of its previously reported financial statements for the
fiscal year ended July 31, 2004 as a result of clerical errors in the
calculation of inventory discovered by management at the company's military
boot unit, that the company's previously reported financial statements for the
fiscal year ended July 31, 2004 should no longer be relied upon pending the
outcome of the review and that following the completion of the review the
company would amend its Annual Report on Form 10-K for the fiscal year ended
July 31, 2004 to restate its previously reported fiscal 2004 financial
statements.
Consistent with the preliminary review results announced by the company on
December 20, 2004, the company's completed review indicates that its inventory
was overstated and the related cost of revenues was understated by
approximately $929,000 for the fiscal year ended July 31, 2004. As a result,
the company's net earnings from continuing operations were approximately
$3,206,000 for the fiscal year ended July 31, 2004, as opposed to net earnings
from continuing operations of $3,740,000 as previously reported in the
company's Form 10-K filed on October 29, 2004.
The company further announced that it had filed its Form 10-Q for the first
quarter of fiscal 2005 which had been delayed pending completion of the review
of its financial statements for the fiscal year ended July 31, 2004 and the
filing of the Form 10-K/A to restate the Company's previously reported fiscal
2004 financial statements.
The company reported consolidated net revenues from continuing operations for
the first quarter of fiscal 2005 of $20,434,000, an increase of 27.5% over
consolidated net revenues from continuing operations of $16,023,000 reported
for the first quarter of fiscal 2004. Consolidated net earnings from
continuing operations for the first quarter of 2005 amounted to $807,000, or
$.29 per share, compared to consolidated net earnings from continuing
operations of $823,000, or $.29 per share for the first quarter of fiscal 2004.
On September 9, 2004, the company entered into a definitive agreement under
which it sold substantially all the assets of its McRae Office Solutions, Inc.
subsidiary to Connected Office Products, Inc. (COPI). COPI is a subsidiary of
TOPAC U.S.A., Inc., which is headquartered in Irvine, California, and operates
a network of wholly owned subsidiaries involved in the sales, service, and
distribution of office products. Under the terms of the Asset Purchase
Agreement, COPI purchased substantially all of the assets of McRae Office
Solutions, Inc. for $11,000,000 subject to adjustment based on the net book
value of the acquired assets as of August 28, 2004. Based on the company's
post-closing calculation of the net book value of the acquired assets, the
company expects an approximately $206,000 reduction in the purchase price. The
purchaser is in the process of reviewing the calculation of this adjustment and
it is subject to change depending on the parties' final agreement on the amount
of the adjustment.
Based in part on the company's current estimate of the purchase price
adjustment, net earnings from discontinued operations for the first quarter of
fiscal 2005 amounted to $1,906,000, or $.69 per share, as compared to a net
loss from discontinued operations for the first quarter of fiscal 2004 of
$261,000, or $.09 per share.
Consolidated net revenues from continuing operations for the first quarter of
fiscal 2005 totaled $20.4 million as compared to $16.0 million for the first
quarter of fiscal 2004. This increase in net revenues was primarily
attributable to the continued high demand for military combat boots for the
U.S. Government and improved sales in the bar code and western and work boot
business.
Consolidated gross profit from continuing operations for fiscal 2005 increased
to $4.6 million over the $4.0 million reported in fiscal 2004. This growth in
gross profit was primarily the result of higher net revenues and higher margins
on imported western and work boots.
Selling, general and administrative expenses from continuing operations
increased from $2.4 million for the first quarter of fiscal 2004 to $3.1
million for the first quarter of fiscal 2005 primarily as a result of higher
sales commissions, group health insurance costs, and professional fees
associated primarily with compliance costs incurred to assess and improve the
company's internal control over financial reporting as required by Section 404
of the Sarbanes-Oxley Act of 2002 and related SEC rules.
DATASOURCE: McRae Industries, Inc.
CONTACT: D. Gary McRae of McRae Industries, Inc., +1-910-439-6147
Web site: http://www.mcraeindustries.com/