Yahoo Finance McRAE INDUSTRIES, INC. REPORTS EARNINGS FOR THE FIRST QUARTER OF FISCAL 2024
MOUNT GILEAD, N.C., Jan. 5, 2024 /PRNewswire/ -- McRae Industries, Inc. (Pink Sheets: MCRAA and MCRAB) reported consolidated net revenues for the first quarter of fiscal 2024 of $32,826,000 as compared to $33,783,000 for the first quarter of fiscal 2023. Net earnings for the first quarter of fiscal 2024 amounted to $3,222,000, or $1.43 per diluted Class A common share as compared to $2,857,000, or $1.26 per diluted Class A common share, for the first quarter of fiscal 2023.
FIRST QUARTER FISCAL 2024 COMPARED TO FIRST QUARTER FISCAL 2023
Consolidated net revenues totaled $32.8 million for the first quarter of fiscal 2024 as compared to $33.8 million for the first quarter of fiscal 2023. Sales related to our western/lifestyle boot products for the first quarter of fiscal 2024 totaled $22.0 million as compared to $26.8 million for the first quarter of fiscal 2023. This 18% decrease was seen across most of our western brands. We have seen a slowdown in demand, especially with the independent retailers who, for the most part, were over inventoried during the quarter. Revenues from our work boot products increased approximately 35%, from $7.0 million for the first quarter of fiscal 2023 to $9.4 million for the first quarter of fiscal 2024. This is primarily a result of an increase in military boot sales.
Consolidated gross profit for the first quarter of fiscal 2024 amounted to approximately $9.9 million as compared to $10.3 million for the first quarter of fiscal 2023. However, gross profit as a percentage of net revenues remained relatively consistent at 30.2% for the first quarter of fiscal 2024 as compared to 30.5% for the first quarter of fiscal 2023. Gross profit was positively affected by $1.6 million from the sale of real estate held for investment.
Consolidated selling, general and administrative ("SG&A") expenses remained relatively consistent at approximately $6.0 million for the first quarter of fiscal 2024 and fiscal 2023.
As a result of the above, the consolidated operating profit for the first quarter of fiscal 2024 amounted to $3.9 million as compared to $4.2 million for the first quarter of fiscal 2023.
Financial Condition and Liquidity
Our financial condition remained strong at October 28, 2023 as cash and cash equivalents totaled $24.0 million as compared to $18.3 million at July 29, 2023. Our working capital increased from $75.8 million at July 29, 2023 to $78.9 million at October 28, 2023.
We currently have two lines of credit totaling $6.75 million, all of which were fully available at October 28, 2023. 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 2025. Our $5.0 million line of credit, which also expires in January 2025, is secured by the inventory and accounts receivable of our Dan Post Boot Company subsidiary.
Net cash provided in operating activities for the first quarter of fiscal 2024 amounted to $7.2 million. Net earnings, adjusted for depreciation and other non-cash items, contributed approximately $2.0 million of cash. Inventory and accrued income taxes provided approximately $4.6 million of cash.
Net cash used in investing activities for the first quarter of fiscal 2024 totaled approximately $1.2 million primarily due to $8.9 million in security purchases, offset by $6.2 million in security sales. Additionally, as mentioned in the Company's latest Annual Report, $1.7 million in cash was provided by the sale of land through our affiliate American Mortgage Investment Company (AMIC).
Net cash used in financing activities for the first quarter of fiscal 2024 totaled $0.3 million, which was primarily used for dividend payments.
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 the remainder of fiscal 2024.
Forward-Looking Statements
This press release includes certain forward-looking statements. Important factors that could cause actual results or events to differ materially from those projected, estimated, assumed or anticipated in any such forward-looking statements include: the effect of competitive products and pricing, risks unique to selling goods to the Government (including variation in the Government's requirements for our products and the Government's ability to terminate its contracts with vendors), changes in fashion cycles and trends in the western boot business, loss of key customers, acquisitions, supply interruptions, additional financing requirements, our expectations about future Government orders for military boots, loss of key management personnel, our ability to successfully develop new products and services, and the effect of general economic conditions in our markets.
McRae Industries, Inc. and Subsidiaries | ||||
CONSOLIDATED BALANCE SHEETS | ||||
(In thousands, except share data) | ||||
(Unaudited) | ||||
October 28, | July 29, | |||
ASSETS | ||||
Current assets: | ||||
Cash and cash equivalents | $24,001 | $18,329 | ||
Equity investments | 6,209 | 6,459 | ||
Debt securities | 17,882 | 15,047 | ||
Accounts receivable, net | 19,435 | 19,880 | ||
Inventories, net | 18,045 | 21,914 | ||
Income tax receivable | - | 370 | ||
Prepaid expenses and other current assets | 661 | 317 | ||
Total current assets | 86,233 | 82,316 | ||
Property and equipment, net | 4,829 | 4,917 | ||
Other assets: | ||||
Deposits | 14 | 14 | ||
Right to Use Asset | 2,240 | 2,362 | ||
Real estate held for investment | 2,964 | 3,036 | ||
Trademarks | 2,824 | 2,824 | ||
Total other assets | 8,042 | 8,236 | ||
Total assets | $99,104 | $95,469 | ||
McRae Industries, Inc. and Subsidiaries | ||||
CONSOLIDATED BALANCE SHEETS | ||||
(In thousands, except share data) | ||||
(Unaudited) | ||||
October 28, | July 29, | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
Current liabilities: | ||||
Accounts payable | $2,801 | $2,122 | ||
Accrued employee benefits | 2,168 | 1,783 | ||
Accrued payroll and payroll taxes | 630 | 1,293 | ||
Lease liability | 429 | 429 | ||
Income tax payable | 366 | - | ||
Other | 962 | 878 | ||
Total current liabilities | 7,356 | 6,505 | ||
Lease liability | 1,811 | 1,933 | ||
Deferred tax liabilities | 114 | 114 | ||
Total liabilities | 9,281 | 8,552 | ||
Shareholders' equity: | ||||
Common Stock: | ||||
Class A, $1 par value; authorized 5,000,000 shares | 1,896 | 1,896 | ||
Class B, $1 par value; authorized 2,500,000 shares; | 364 | 364 | ||
Retained earnings | 87,563 | 84,657 | ||
Total shareholders' equity | 89,823 | 86,917 | ||
Total liabilities and shareholders' equity | $99,104 | $95,469 | ||
McRae Industries, Inc. and Subsidiaries | ||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
(In thousands, except share data) | ||||
(Unaudited) | ||||
Three Months Ended | ||||
October 28, | October 29, | |||
2023 | 2022 | |||
Net revenues | $32,826 | $33,783 | ||
Cost of revenues | 22,917 | 23,489 | ||
Gross profit | 9,909 | 10,294 | ||
Selling, general and administrative expenses | 6,003 | 6,046 | ||
Operating profit | 3,906 | 4,248 | ||
Other income | 64 | (189) | ||
Earnings before income taxes | 3,970 | 4,059 | ||
Provision for income taxes | 748 | 1,202 | ||
Net earnings | $3,222 | $2,857 | ||
Earnings per common share: | ||||
Diluted earnings per share: | ||||
Class A | 1.43 | 1.26 | ||
Class B | NA | NA | ||
Weighted average number of common shares outstanding: | ||||
Class A | 1,896,219 | 1,895,035 | ||
Class B | 363,941 | 365,125 | ||
Total | 2,260,160 | 2,260,160 | ||
McRae Industries, Inc. and Subsidiaries | |||||||
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY | |||||||
(In thousands, except share data) | |||||||
(Unaudited) | |||||||
Common Stock, $1 par value | Accumulated Other | ||||||
Class A | Class B | Comprehensive | Retained | ||||
Shares | Amount | Shares | Amount | Income (Loss) | Earnings | ||
Balance, July 30, 2022 | 1,895,035 | $1,895 | 365,125 | $365 | $0 | $78,989 | |
Cash Dividend ($0.14 per Class A common stock) | (265) | ||||||
Cash Dividend ($0.14 per Class B common stock) | (51) | ||||||
Net earnings | 2,857 | ||||||
Balance, October 29, 2022 | 1,895,035 | $1,895 | 365,125 | $365 | $0 | $81,530 | |
Common Stock, $1 par value | Accumulated Other | ||||||
Class A | Class B | Comprehensive | Retained | ||||
Shares | Amount | Shares | Amount | Income (Loss) | Earnings | ||
Balance, July 29, 2023 | 1,895,949 | $1,896 | 364,211 | $364 | $0 | $84,657 | |
Conversion of Class B | 385 | - | (385) | - | |||
to Class A Stock | |||||||
Cash Dividend ($0.14 per Class A common stock) | (265) | ||||||
Cash Dividend ($0.14 per Class B common stock) | (51) | ||||||
Net earnings | 3,222 | ||||||
Balance, October 28, 2023 | 1,896,334 | $1,896 | 363,826 | $364 | $0 | $87,563 | |
McRae Industries, Inc. and Subsidiaries | ||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
(In thousands) | ||||
(Unaudited) | ||||
Three Months Ended | ||||
October 28, | October 29, | |||
2023 | 2022 | |||
Cash Flows from Operating Activities: | ||||
Net earnings | $3,222 | $2,857 | ||
Adjustments to reconcile net earnings to net cash used in operating activities | 3,928 | (4,036) | ||
Net cash used in operating activities | 7,150 | (1,179) | ||
Cash Flows from Investing Activities: | ||||
Proceeds from sale of land | 1,660 | - | ||
Capital expenditures | (78) | (374) | ||
Purchase of securities | (8,926) | (103) | ||
Proceeds from sale of securities | 6,182 | - | ||
Net cash provided by investing activities | (1,162) | (477) | ||
Cash Flows from Financing Activities: | ||||
Dividends paid | (316) | (316) | ||
Net cash used in financing activities | (316) | (316) | ||
Net (Decrease) Increase in Cash and Cash equivalents | 5,672 | (1,972) | ||
Cash and Cash Equivalents at Beginning of Year | 18,329 | 15,315 | ||
Cash and Cash Equivalents at End of Period | $24,001 | $13,343 | ||
View original content:https://www.prnewswire.com/news-releases/mcrae-industries-inc-reports-earnings-for-the-first-quarter-of-fiscal-2024-302027200.html
SOURCE McRae Industries, Inc.
