Mcrae (AMEX:MRI.A)
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McRae Industries, Inc. Announces the Sale of Its McRae Office
Solutions, Inc. Subsidiary
MOUNT GILEAD, N.C., Sept. 9 /PRNewswire-FirstCall/ -- McRae Industries, Inc.
(Amex: MRIA; MRIB) announced that it has entered into a definitive agreement
under which it has sold substantially all of the assets of its McRae Office
Solutions, Inc. subsidiary to Connected Office Products, Inc. (COPI). COPI is a
subsidiary of Toshiba America Business Solutions, Inc. (TABS) 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 has agreed to purchase
the assets of McRae Office Solutions for $11,000,000 subject to adjustment
based on the net book value of the acquired assets as of August 28, 2004. In
addition, COPI has agreed to offer employment to all of the current employees
and continue to operate the business from the same facilities in Mount Gilead,
North Carolina.
"McRae Office Solutions has been a vital part of McRae Industries for over 20
years," said Gary McRae, President and CEO of McRae Industries. "We are
delighted and excited to have found a strategic buyer like Toshiba, which will
provide the necessary resources to take McRae Office Solutions to the next
level and continue the same exceptional service and support that our customers
have come to enjoy."
The company expects to use the proceeds from the sale to expand and retool its
military and western boot businesses, as well as to provide necessary capital
to support the company's bar code business research and development efforts.
Net revenues for McRae Office Solutions amounted to $17.1 million, $22.5
million and $24.7 million for the nine months ended May 1, 2004 and fiscal
years ended August 2, 2003 and August 3, 2002, respectively. Earnings (loss)
from operations for these same periods totaled ($146,000), $231,000 and
$629,000, respectively.
McRae Industries, Inc. was founded in 1959 as a manufacturer and distributor of
children's shoes. Today, McRae Industries has grown into a widely diversified
company involved in manufacturing, sales and distribution of military footwear,
western and work boots; sales and distribution of bar code reading and printing
devices; and sales and servicing of copiers and facsimile machines. The Company
also operates other smaller businesses. McRae Industries, Inc. has offices
throughout the United States. Its Corporate headquarters is located in Mount
Gilead, North Carolina.
In addition to historical information, this press release includes certain
forward-looking statement as such term is defined in Section 27A of the
Securities Act and Section 21E of the Exchange Act. Important factors that
could cause actual results or events to differ materially from those projected,
estimated, assumed or anticipated in any such forward-looking statements
include: the effect of competitive products and pricing, risks unique to
selling goods to the Government (including variation in the Government's
requirements for our products and the ability to terminate its contracts with
vendors), loss of key customers, acquisitions, supply interruptions, additional
financing requirements, loss of key management personnel, our ability to
successfully develop new products and services, our expectations about future
Government orders for military boots, and the effect of general economic
conditions in our markets.
DATASOURCE: McRae Industries, Inc.
CONTACT: D. Gary McRae of McRae Industries, Inc., +1-910-439-6147
Web site: http://www.mcraeindustries.com/