McRae reports earnings for Q1 2009

22 Dec '08

6 min read

McRae Industries Inc reported consolidated net revenues for the first quarter of fiscal 2009 of $20,334,000 as compared to $21,305,000 for the first quarter of fiscal 2008. Net earnings for the first quarter of fiscal 2009 amounted to $1,212,000, or $.55 per diluted Class A common share as compared to net earnings of $1,849,000, or $.79 per diluted Class A common share, for the first quarter of fiscal 2008.

Consolidated net revenues for the first quarter of fiscal 2009 amounted to $20.3 million as compared to $21.3 million for the first quarter of fiscal 2008. The decline in net revenues was primarily attributable to reduced military boot requirements by the U.S. Government and a soft market for bar code related products, which was partially offset by a strong seasonal demand for western and work boot products.

Consolidated gross profit totaled $6.0 million for the first quarter of fiscal 2009 as compared to $6.7 million for the first quarter of fiscal 2008. The reduction in gross profit was the result of decreased net revenues and lower profit margins for each of our major business units.

Consolidated selling, general and administrative expenses were $4.1 million for the first quarter of fiscal 2009 as compared to $4.0 million for the first quarter of fiscal 2008. Increased expenditures for sales salaries and commissions and administrative salaries were partially offset by reduced charges for professional services, product advertising, employee benefits and bad debt write-offs.

As a result of the above, the consolidated operating profit for the first quarter of fiscal 2009 amounted to $2.0 million as compared to $2.7 million for the first quarter of fiscal 2008.

Net revenues for the bar code business for the first quarter of fiscal 2009 amounted to $2.9 million as compared to $3.5 million for the first quarter of fiscal 2008. The decrease in net revenues was primarily attributable to reduced mobility solution service revenue as customers delayed their programs. Revenues from our manufactured products continued to decline as we migrate to our mobility solution market approach.

Gross profit fell from $1.0 million for the first quarter of fiscal 2008 to $517,000 for the first quarter of fiscal 2009 primarily the result of the decline in net revenues and lower profit margins as service related revenues accounted for a smaller percentage of the overall sales mix.

Net revenues for the military boot business for the first quarter of fiscal 2009 totaled $3.5 million, down from $5.3 million for the first quarter of fiscal 2008 primarily attributable to decreased military combat boot requirements under the contract awarded by the U.S. Government in May 2007.

Gross profit for the first quarter of fiscal 2009 amounted to $503,000 as compared to $913,000 for the first quarter of fiscal 2008. The decline in gross profit was attributable to reduced net revenues and lower profit margins. Gross profit as a percentage of net revenues fell from 17% for the first quarter of fiscal 2008 to 14% for the first quarter of fiscal 2009 as lower production levels resulted in higher per unit manufacturing costs.

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