Mcrae (AMEX:MRI.A)
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McRae Industries, Inc. Reports Earnings for Second Quarter of
Fiscal 2005
MOUNT GILEAD, N.C., March 15 /PRNewswire-FirstCall/ -- McRae Industries, Inc.
(Amex: MRIA; MRIB) reported consolidated net revenues from continuing
operations for the second quarter of fiscal 2005 of $15,525,000 as compared to
$14,896,000 for the second quarter of fiscal 2004. Net earnings for the second
quarter of fiscal 2005 amounted to $482,000, or $.17 per share, as compared to
a net loss of $14,000, or less than $.01 per share, for the same period of
fiscal 2004.
The 4% increase in consolidated net revenues resulted from higher demand for
western and work boot and bar code business products, which was partially
offset by lower military boot requirements by the U.S. Government.
The growth in consolidated net earnings for the second quarter of fiscal 2005
as compared to the second quarter of fiscal 2004 was the result of improved
performance by the bar code and western and work boot businesses and a $2,000
loss from discontinued operations in the second quarter of fiscal 2005 compared
to a $141,000 loss from discontinued operations in the second quarter of fiscal
2004.
Consolidated net revenues from continuing operations for the first six months
of fiscal 2005 amounted to $35,958,000 as compared to $30,919,000 for the first
six months of fiscal 2004. This increase in net revenues was primarily
attributable to higher military boot requirements by the Government and
improved markets for the bar code and western and work boot products.
Net earnings for the first six months of fiscal 2005 amounted to $3,195,000, or
$1.15 per share as compared to $548,000, or $.20 per share, for the first six
months for fiscal 2004. This increase in net earnings was primarily
attributable to the improved performance of our western and work boot business
and the sale of our office products business, which contributed $1.9 million
for the first six months of fiscal 2005 as compared to a $402,000 loss for the
first six months of fiscal 2004.
On September 30, 2004, the U.S. Government (the Government) exercised the first
year option under our Contract with the Government awarded to us on September
30, 2003 (the Contract). Since the completion of the "surge" requirement in
the first quarter of fiscal 2005, the Government has reduced its production
requirement and the minimum boot requirement under the Contract has been
reduced from 276,460 pair to 138,230 pair. In addition, we were not successful
in securing a recent Government contract to supplement our current Contract. As
a result, on March 3, 2005 we decided to consolidate all military boot
production at our North Carolina plant by closing our Tennessee manufacturing
facility effective March 18, 2005. The closing of this plant will impact 120
employees and we estimate will cause us to incur approximately $130,000 to
$140,000 in severance costs. We are currently evaluating asset impairment
issues (the Tennessee manufacturing facility currently has a book value of
approximately $330,000) and other matters related to the plant closing.
In addition to historical information, this press release includes certain
forward-looking statements as such term is defined in Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
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 Government's ability
to terminate its contracts with vendors), loss of key customers, acquisitions,
supply interruptions, additional financing requirements, our expectations about
future Government orders for military boots, loss of key management personnel,
our ability to successfully develop new products and services, and the effect
of general economic conditions in our markets.
Three Months Ended Six Months Ended
January 29, January 31, January 29, January 31,
2005 2004 2005 2004
Net revenues from
continuing operations $15,525 $14,896 $35,958 $30,919
Earnings from continuing
operations before income
taxes 698 206 1,942 1,489
Income taxes provision
(benefit) 214 82 651 544
Minority shareholder's interest - (3) - (5)
Net earnings from
continuing operations 484 127 1,291 950
Net earnings (loss) from
discontinued operations (2) (141) 1,904 (402)
Net earnings (loss) $482 $(14) $3,195 $548
Net earnings (loss) per
common share:
Continuing operations $.17 $.05 $.46 $.34
Discontinued operations - (.05) .69 (.14)
Net earnings per common share $.17 $.00 $1.15 $.20
Weighted average number
of common shares
outstanding 2,768,499 2,768,499 2,768,499 2,768,499
DATASOURCE: McRae Industries, Inc.
CONTACT: Gary McRae, President of McRae Industries, Inc.,
+1-910-439-6147
Web site: http://www.mcraeindustries.com/