McRae posts earnings for Q1

14 Jun '10

4 min read

McRae Industries, Inc. reported consolidated net revenues from operations for the third quarter of fiscal 2010 of $15,476,000 as compared to $13,017,000 for the third quarter of fiscal 2009. Net earnings for the third quarter of fiscal 2010 amounted to $695,000, or $0.35 per diluted Class A common share as compared to a net loss of $1,580,000, or ($0.55) per diluted Class A common share, for the third quarter of fiscal 2009.

Consolidated net revenues from operations for the first nine months of fiscal 2010 totaled $49,228,000 as compared to $49,942,000 for the first nine months of fiscal 2009. Net earnings for the first nine months of fiscal 2010 amounted to $2,442,000, or $1.19 per diluted Class A common share, as compared to $87,000, or $0.26 per diluted Class A common share, for the first nine months of fiscal 2009.

Third quarter Fiscal 2010 compared to third quarter Fiscal 2009
Consolidated net revenues for the third quarter of fiscal 2010 amounted to $15.5 million as compared to $13.0 million for the third quarter of fiscal 2009. The increase in net revenues was attributable to continued strong demand for our western/life style products and a successful turnaround from the supply chain interruptions that significantly impacted third quarter 2009 sales. As a result, net revenues for our western/life style products grew from $5.6 million for the third quarter of fiscal 2009 to $9.4 million for the third quarter of fiscal 2010. Net revenues from our work boot products reported a modest 5% increase over the third quarter results for fiscal 2009 primarily attributable to stronger demand for our branded John Deere products.

Our military boot business continues to be adversely impacted by reduced boot requirements from the U. S. Government (the "Government"). However, on June 3, 2010, the Company was awarded a new contract (the "Contract") to produce a green, temperate weather boot for the United States Air Force. The Contract provides for a base year and one option year with a minimum quantity of 48,792 pair and a maximum quantity of 129,636 pair for the two year period. The Contract could possibly generate revenue of approximately $10.5 million over the two year period if the Government orders the maximum quantity; however, there are no assurances that the Government will purchase the maximum quantity of boots.

Consolidated gross profit totaled $4.6 million for the third quarter of fiscal 2010 as compared to $654,000 for the third quarter of fiscal 2009. This significant increase in gross profit resulted primarily from increased net revenues which were not impacted by the previously noted supply chain interruption issues. Gross profit for the western/life style products, as a percentage of net revenues, grew from 2.4% for the third quarter of fiscal 2009 to 35.8% for the third quarter of fiscal 2010, primarily the result of increased net revenues and the recovery from the supply chain issues as previously discussed. Gross profit for the work boot products, as a percentage of net revenues, grew from 9.1% for the third quarter of fiscal 2009 to 20.5% for the third quarter of fiscal 2010, primarily the result of increased net revenues and improved production efficiencies associated with the military boot business.

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