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McRae Industries was founded in 1959 by Branson J. McRae with the primary focus of manufacturing high quality children’s shoes. In 1966, during the height of the Vietnam War, McRae received a contract award from the U. S. Government to manufacture military combat boots for the United States Army using the “direct molded sole” design. As a result, McRae Industries’ Footwear division has provided quality combat boots to the men and women serving in the U. S. Army for more than 40 years.
In a strategic move in 1996, McRae Industries purchased American West Trading Company, a manufacturer and seller of a variety of western boot products. During the 2002 to 2006 time period, the array of western boot products was significantly enhanced by the acquisition of several popular brand names – Dingo, Dan Post and Laredo. Also, during this same period of time, the company’s name was changed to the Dan Post Boot Company to more closely identify our products in the western boot market. In 2005, Dan Post Boot Company became a licensee of John Deere and began to design and market men’s and women’s work boots along with a line of children’s shoes and boots. Dan Post continued to expand its product mix in 2008 with the addition of the durable, price effective McRae Industrial line of work boots.

McRae Industries, Inc. Reports Earnings For Fiscal 2017

MOUNT GILEAD, N.C., Nov. 15, 2017 /PRNewswire/ --  McRae Industries, Inc. (Pink Sheets:  MCRAA and MCRAB) reported consolidated net revenues for fiscal 2017 of $104,316,000 as compared to $108,758,000 for fiscal 2016.  Net earnings for fiscal 2017 totaled $5,083,000 as compared to $4,692,000 for fiscal 2016.  Net earnings per diluted Class A common share were $2.11 for fiscal 2017 as compared to $1.93 for fiscal 2016. 


Consolidated net revenues for fiscal 2017 amounted to approximately $104.3 million as compared to $108.8 million for fiscal 2016.  Our western/lifestyle boot segment, which includes western wear, ladies fashion, and children footwear products under the Dan Post, Laredo, Dingo, El Dorado, and John Deere brand names, experienced a decrease in revenue of 17% from $58.8 million in 2016 to $48.8 million in 2017.  Women's fashion and premium children's boots had the largest sales decrease.  Net revenues for our work boot segment, which includes Dan Post, Laredo, John Deere, and McRae Industrial work boot products along with our military boots, increased by 9.5% with sales increasing from $49.7 million in fiscal 2016 to $54.2 million in 2017.  The military boot sales increased by 15.2% from $39.6 million in 2016 to $45.6 million in 2017, while all other work boot brands decreased 12.8% from $10.1 million in fiscal 2016 to $8.6 million in fiscal 2017. 

Consolidated gross profit for fiscal 2017 totaled $25.6 million as compared to $26.9 million for fiscal 2016.  Gross margin for the western/lifestyle segment decreased from 35% in fiscal 2016 to 34.2% in fiscal 2017.  Gross margins on our work boot segment increased slightly from 12.3% in fiscal 2016 to 15.8% in fiscal 2017 because of manufacturing efficiencies, a higher volume of production, and better product mix in our military boots.

Consolidated selling, general and administrative ("SG&A") expenses amounted to $17.8 million as compared to $19.8 million for fiscal 2016.  This was primarily driven by decreased commissions, salaries, advertising, and a company-wide effort to minimize expenditures.

As a result of the above, consolidated operating profit totaled approximately $7.8 million for fiscal 2017 as compared to $7.1 million for fiscal 2016.


At July 29, 2017, our financial condition and liquidity remained strong as cash and cash equivalents totaled $28.1 million as compared to $15.7 million at July 30, 2016.  Our working capital totaled $56.5 million at July 29, 2017 as compared to $52.8 million at July 30, 2016.

We currently have two lines of credit totaling $6.75 million, both of which were fully available at July 29, 2017.  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 2018.  The $5.0 million line of credit, which also expires in January 2018, is secured by the inventory and accounts receivable of our Dan Post Boot Company subsidiary. 

Net cash provided by operating activities for fiscal 2017 amounted to approximately $14.8 million.  Net earnings, as adjusted for depreciation, contributed approximately $6.3 million of cash, and a reduction in income tax receivable contributed approximately $0.7 million.  Lower inventory levels throughout the business provided approximately $9.7 million of cash.  The timing of payments for accounts payable and lower accrued payroll used approximately $2.6 million of cash. 

Net cash used in investing activities totaled approximately $0.7 million.  The majority was used for capital expenditures and the purchase of securities.  This was partially offset by proceeds from the sale of securities.

Net cash used to finance our dividend payments and the purchase of common stock totaled approximately $1.8 million.

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 2018.


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.

Copyright  2017