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MOUNT GILEAD, N.C., Dec. 13 /PRNewswire-FirstCall/ -- McRae Industries,
Inc. (Pink Sheets: MRINA; MRINB) reported consolidated net revenues from
continuing operations for the first quarter of fiscal 2006 of $18,560,000 as
compared to $20,434,000 for the first quarter of fiscal 2005. Net earnings
from continuing operations for the first quarter of fiscal 2006 amounted to
$1,095,000, or $.46 per diluted Class A common share as compared to net
earnings from continuing operations of $807,000, or $.33 per diluted Class A
common share, for the first quarter of fiscal 2005.
The decrease in consolidated net revenues was primarily attributable to
reduced military boot requirements for the U. S. Government (the "Government")
as a result of the completion of the "surge" requirement under our military
boot contract with the Government in the first quarter of fiscal 2005. The
decline in military boot net revenues was partially offset by increased sales
of bar code and western and work boot products.
Consolidated gross profit for the first quarter of fiscal 2006 totaled
approximately $5.3 million as compared to approximately $4.6 million for the
first quarter of fiscal 2005. This improvement in gross profit resulted
primarily from a greater proportion of higher margin western and work boot
products in the overall sales mix.
Consolidated research and development costs fell from $304,000 for the
first quarter of fiscal 2005 to $191,000 for the first quarter of fiscal 2006
as a result of the new bar code products introduction into the market.
Consolidated selling, general and administrative ("SG&A") expenses for the
first quarter of fiscal 2006 totaled $3.5 million as compared to $3.1 million
for the first quarter of fiscal 2005. This rise in SG&A expenses was primarily
attributable to increased expenditures for sales salaries and commissions,
sales travel costs, marketing and advertising costs, administrative salaries
and employee benefit costs, which were partially offset by reduced
expenditures for group health insurance costs and professional fees.
At a special meeting held on November 17, 2005 the Companys stockholders
approved a 1-for-200 reverse stock split, to be followed immediately by a 200-
for-1 forward stock split, of the outstanding shares of both classes of its
common stock (Class A and Class B)(the "transaction") for the purpose of
permitting the company to deregister the common stock under the Securities
Exchange Act of 1934 (the "Exchange Act") and thereby eliminate the
significant expense required to comply with the reporting and other
requirements thereunder.
To implement the transaction, the Company filed certificates of amendment
to its certificate of incorporation with the Secretary of State of Delaware as
a result of which the transaction took effect as of 11:59 p.m. (eastern time)
on December 1, 2005.
Pursuant to the transaction, stockholders of record holding fewer than 200
shares of the Companys common stock (Class A or Class B) immediately before
the transaction had their shares cancelled and converted into the right to
receive from the Company a cash payment of $14.25 for each such share owned
before the reverse stock split. Stockholders owning 200 or more shares of a
class of common stock (Class A or Class B) immediately before the transaction
will continue to hold the same number of shares of that class after completion
of the transaction and will not receive any cash payment for their shares of
that class. The Company expects to pay approximately $2.78 million to purchase
shares cashed out in the transaction.
As a result of the transaction, the number of holders of record for each
class of the Companys common stock was reduced to fewer than 300, which will
enable the company to terminate the registration of its common stock under the
Exchange Act. In connection with the transaction, trading of the common stock
on the American Stock Exchange was suspended. As previously announced, on
November 4, 2005 the Company filed an application with the SEC to voluntarily
delist and deregister the common stock. The Company expects to receive an
order from the SEC effecting the delisting during the week beginning December
12, 2005.
The common stock is currently quoted in the Pink Sheets and stockholders
will continue to be able to trade their shares in the over-the-counter markets
or private transactions.
McRae Industries, Inc.
Condensed and Consolidated Statements of Income
First Quarter of Fiscal 2006
For the Three Months Ended
October 29, 2005 and October 30, 2004
Three Months Ended
October 29, October 30,
2005 2004
Net revenues from continuing operations $18,560 $20,434
Earnings from continuing operations
before income taxes 1,685 1,244
Income taxes provision 590 437
Net earnings from continuing operations 1,095 807
Earnings from discontinued operations,
net of income tax 0 1,906
Net earnings $ 1,095 $ 2,713
Earnings per common share:
Earnings per common share from
continuing operations:
Basic earnings per share:
Class A $.57 $.48
Class B 0 0
Diluted earnings per share:
Class A .46 .33
Class B NA NA
Earnings per common share from
discontinued operations:
Basic earnings per share:
Class A 0 .98
Class B 0 0
Diluted earnings per share:
Class A 0 .69
Class B NA NA
Net earnings per common share:
Basic earnings per share:
Class A .57 1.46
Class B 0 0
Diluted earnings per share:
Class A $.46 $1.02
Class B NA NA
Weighted average number of common shares
outstanding:
Class A 2,240,841 1,943,543
Class B 527,658 824,956
Total 2,768,499 2,768,499
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