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McRae reports earnings for Q1 2009
22 Dec '08
6 min read
SG&A expenses fell from $247,000 for the first quarter of fiscal 2008 to $195,000 for the first quarter of fiscal 2009, primarily the result of decreased employee benefit charges.
As a result of the above, the operating profit for the military boot business amounted to $308,000 for the first quarter of fiscal 2009 as compared to $666,000 for the first quarter of fiscal 2008.
On November 7, 2008, we were awarded an additional Government contract to produce tan, temperate weather military combat boots. The new contract covers a base year and two one-year option periods. Each Contract period provides for a minimum and maximum boot requirement of 17,556 pairs and 100,002 pairs, respectively. While we will operate with two military boot contracts for fiscal 2009, revenues for this fiscal year are expected to be significantly less than last year based on the current delivery schedule for the remainder of this fiscal year.
Net revenues for the western and work boot business totaled $13.8 million for the first quarter of fiscal 2009 as compared to $11.9 million for the first quarter of fiscal 2008. The increase in net revenues was primarily attributable to continued strong demand for our western and work boot products. While customer orders have been strong during the fall selling season, it is unclear how the current economic climate will impact the remainder of fiscal 2009.
Gross profit for the first quarter of fiscal 2009 was $4.9 million as compared to $4.4 million for the first quarter of fiscal 2008. The growth in gross profit was primarily attributable to the increase in net revenues while gross profit as a percentage of net revenues fell from 36.9% for the first quarter of fiscal 2008 to 35.3% for the first quarter of fiscal 2009 as sales incentive programs impacted profit margins.
SG&A expenses grew from $2.8 million for the first quarter of fiscal 2008 to $3.0 million for the first quarter of fiscal 2009, primarily the result of increased expenditures for sales related salaries and commissions, travel costs, and employee benefit charges that were partially offset by reduced advertising and marketing costs.
Our financial condition remained strong at November 1, 2008 as cash and cash equivalents totaled $11.6 million as compared to $13.8 million at August 2, 2008. Our working capital increased from $33.6 million at August 2, 2008 to $34.7 million at November 1, 2008.
We currently have three lines of credit with a bank totaling $7.75 million, all of which were fully available at November 1, 2008. One credit line totaling $1.75 million expires in January 2009. One $3.0 million line of credit, which expires in November 2009, is secured by the inventory and accounts receivable of our Dan Post Boot Company subsidiary. The other $3.0 million line of credit is unsecured and expires in December 2009.
We believe that our current cash and cash equivalents, cash generated from operations, and available credit lines will be sufficient to meet our capital requirements for fiscal 2009. Dividend payments for the first quarter of fiscal 2009 used $188,000 of cash.
As a result of the above, the operating profit for the military boot business amounted to $308,000 for the first quarter of fiscal 2009 as compared to $666,000 for the first quarter of fiscal 2008.
On November 7, 2008, we were awarded an additional Government contract to produce tan, temperate weather military combat boots. The new contract covers a base year and two one-year option periods. Each Contract period provides for a minimum and maximum boot requirement of 17,556 pairs and 100,002 pairs, respectively. While we will operate with two military boot contracts for fiscal 2009, revenues for this fiscal year are expected to be significantly less than last year based on the current delivery schedule for the remainder of this fiscal year.
Net revenues for the western and work boot business totaled $13.8 million for the first quarter of fiscal 2009 as compared to $11.9 million for the first quarter of fiscal 2008. The increase in net revenues was primarily attributable to continued strong demand for our western and work boot products. While customer orders have been strong during the fall selling season, it is unclear how the current economic climate will impact the remainder of fiscal 2009.
Gross profit for the first quarter of fiscal 2009 was $4.9 million as compared to $4.4 million for the first quarter of fiscal 2008. The growth in gross profit was primarily attributable to the increase in net revenues while gross profit as a percentage of net revenues fell from 36.9% for the first quarter of fiscal 2008 to 35.3% for the first quarter of fiscal 2009 as sales incentive programs impacted profit margins.
SG&A expenses grew from $2.8 million for the first quarter of fiscal 2008 to $3.0 million for the first quarter of fiscal 2009, primarily the result of increased expenditures for sales related salaries and commissions, travel costs, and employee benefit charges that were partially offset by reduced advertising and marketing costs.
Our financial condition remained strong at November 1, 2008 as cash and cash equivalents totaled $11.6 million as compared to $13.8 million at August 2, 2008. Our working capital increased from $33.6 million at August 2, 2008 to $34.7 million at November 1, 2008.
We currently have three lines of credit with a bank totaling $7.75 million, all of which were fully available at November 1, 2008. One credit line totaling $1.75 million expires in January 2009. One $3.0 million line of credit, which expires in November 2009, is secured by the inventory and accounts receivable of our Dan Post Boot Company subsidiary. The other $3.0 million line of credit is unsecured and expires in December 2009.
We believe that our current cash and cash equivalents, cash generated from operations, and available credit lines will be sufficient to meet our capital requirements for fiscal 2009. Dividend payments for the first quarter of fiscal 2009 used $188,000 of cash.
McRae Industries Inc
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