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Strong demand for McRae western boot products
07 Dec '09
6 min read
As a result of the above, the operating loss for the military boot business amounted to $175,000 for the first quarter of fiscal 2010 as compared to an operating profit of $308,000 for the first quarter of fiscal 2009.
Western and Work Boot Business
Net revenues for the western and work boot business totaled $14.3 million for the first quarter of fiscal 2010 as compared to $13.8 million for the first quarter of fiscal 2009. The increase in net revenues was primarily attributable to continued strong demand for our western boot products, especially women's fashion products. While our work boot segment continues to be a major revenue contributor, product demand has lessened as a result of the current economic climate.
Gross profit for the first quarter of fiscal 2010 was $5.4 million as compared to $4.9 million for the first quarter of fiscal 2009. The increase in gross profit was attributable to higher net revenues and improved profit margins, which grew from 35.3% for the first quarter of fiscal 2009 to 37.6% for the first quarter of fiscal 2010.
SG&A expenses for the first quarter of fiscal 2010 amounted to $3.4 million as compared to $3.0 million for the first quarter of fiscal 2009, primarily attributable to increased expenditures for sales related salaries and commissions, employee benefit expense, and corporate allocated charges.
As a result of the above, the operating profit for the western and work boot business totaled $2.0 million for the first quarter of fiscal 2010 as compared to $1.9 million for the first quarter of fiscal 2009.
Financial Condition and Liquidity
Our financial condition remained strong at October 31, 2009 as cash and cash equivalents totaled $10.4 million as compared to $11.3 million at August 1, 2009. Our working capital increased from $31.8 million at August 1, 2009 to $32.7 million at October 31, 2009.
We currently have two lines of credit with a bank totaling $4.75 million, all of which was fully available at October 31, 2009. One credit line totaling $1.75 million (which is restricted to one hundred percent of the outstanding receivables due from the Government) expires in January 2010. One $3.0 million line of credit, which expires in November 2010, is secured by the inventory and accounts receivable of our Dan Post Boot Company subsidiary.
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 2010.
Net cash used by operating activities for the first quarter of fiscal 2010 amounted to $554,000. Net earnings, as adjusted for depreciation, contributed approximately $1.2 million of cash. Accounts and notes receivable used approximately $2.1 million of cash as a result of the timing of collection of strong first quarter sales primarily attributable to the western and work boot business. The decline ininventory provided approximately $203,000 of cash and was attributable to the strong first quarter sales. The reduction in accounts payable used $373,000 of cash primarily for the payment of inventory purchases. The timing of income tax payments provided approximately $687,000 of cash.
Net cash used by investing activities amounted to $75,000. Capital expenditures used $62,000 of cash for office and computer equipment.
Net cash used in financing activities totaled $232,000 as dividend payments were $187,000 and bank loan principal payments amounted to $45,000.
Western and Work Boot Business
Net revenues for the western and work boot business totaled $14.3 million for the first quarter of fiscal 2010 as compared to $13.8 million for the first quarter of fiscal 2009. The increase in net revenues was primarily attributable to continued strong demand for our western boot products, especially women's fashion products. While our work boot segment continues to be a major revenue contributor, product demand has lessened as a result of the current economic climate.
Gross profit for the first quarter of fiscal 2010 was $5.4 million as compared to $4.9 million for the first quarter of fiscal 2009. The increase in gross profit was attributable to higher net revenues and improved profit margins, which grew from 35.3% for the first quarter of fiscal 2009 to 37.6% for the first quarter of fiscal 2010.
SG&A expenses for the first quarter of fiscal 2010 amounted to $3.4 million as compared to $3.0 million for the first quarter of fiscal 2009, primarily attributable to increased expenditures for sales related salaries and commissions, employee benefit expense, and corporate allocated charges.
As a result of the above, the operating profit for the western and work boot business totaled $2.0 million for the first quarter of fiscal 2010 as compared to $1.9 million for the first quarter of fiscal 2009.
Financial Condition and Liquidity
Our financial condition remained strong at October 31, 2009 as cash and cash equivalents totaled $10.4 million as compared to $11.3 million at August 1, 2009. Our working capital increased from $31.8 million at August 1, 2009 to $32.7 million at October 31, 2009.
We currently have two lines of credit with a bank totaling $4.75 million, all of which was fully available at October 31, 2009. One credit line totaling $1.75 million (which is restricted to one hundred percent of the outstanding receivables due from the Government) expires in January 2010. One $3.0 million line of credit, which expires in November 2010, is secured by the inventory and accounts receivable of our Dan Post Boot Company subsidiary.
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 2010.
Net cash used by operating activities for the first quarter of fiscal 2010 amounted to $554,000. Net earnings, as adjusted for depreciation, contributed approximately $1.2 million of cash. Accounts and notes receivable used approximately $2.1 million of cash as a result of the timing of collection of strong first quarter sales primarily attributable to the western and work boot business. The decline ininventory provided approximately $203,000 of cash and was attributable to the strong first quarter sales. The reduction in accounts payable used $373,000 of cash primarily for the payment of inventory purchases. The timing of income tax payments provided approximately $687,000 of cash.
Net cash used by investing activities amounted to $75,000. Capital expenditures used $62,000 of cash for office and computer equipment.
Net cash used in financing activities totaled $232,000 as dividend payments were $187,000 and bank loan principal payments amounted to $45,000.
McRae Industries Inc
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