McRae Industries, Inc. Earnings Report for the Third Quarter and First Nine Months of Fiscal 2004 MOUNT GILEAD, N.C., June 14 /PRNewswire-FirstCall/ -- McRae Industries, Inc. (Amex: MRIA; MRIB) reported consolidated net revenues for the third quarter of fiscal 2004 of $24,780,000, compared to consolidated net revenues of $19,221,000 reported for the third quarter of fiscal 2003. Consolidated net earnings for the third quarter of fiscal 2004 were $790,000, or $.29 per share, as compared to $568,000, or $.20 per share, for the same period of fiscal 2003. The 29% growth in net revenues for the third quarter of fiscal 2004 as compared to the third quarter of fiscal 2003 was primarily attributable to significantly higher military boot requirement for the U.S. Government, improved market conditions in the bar code business, and continued renewal of countywide school cost-per-copy programs in the office products business. The increase in these revenues was partially offset by lower demand for western boot products. Consolidated net earnings for the third quarter of fiscal 2004 increased 39% over the same period of fiscal 2003 as a result of higher net revenues and a slight reduction in selling, general and administrative expenses, partially offset by higher military boot per unit manufacturing costs, lower military boot selling prices, and increased research and development costs. Consolidated net revenues for the first nine months of fiscal 2004 totaled $65.6 million, an increase of nearly 16% from $56.6 million for the first nine months of fiscal 2003. This growth in net revenues was primarily attributable to greater sales of military boots, bar code equipment, and office products, partially offset by lower sales of western boot products and reduced selling prices for military boots. Consolidated net earnings for the first nine months of fiscal 2004 amounted to $1,338,000, or $.48 per share, as compared to $1,479,000 or $.53 per share, for the first nine months of fiscal 2003. This decrease in net earnings was primarily attributable to lower military boot gross profit margins; increased research and development cost related to the new bar code product; higher selling, general and administrative expenditures, primarily for group health insurance and professional fees; and no significant gains from asset disposals. McRae Industries, Inc. Condensed and Consolidated Statements of Income Third Quarter of Fiscal 2004 For the Nine Months Ended May 1, 2004 and May 3, 2003 Three Months Ended Nine Months Ended May 1, 2004 May 3, 2003 May 1, 2004 May 3, 2003 Net revenues $24,780,000 $19,221,000 $65,602,000 $56,629,000 Earnings before income taxes $1,263,000 $818,000 $2,103,000 $2,299,000 Income taxes provision $474,000 $253,000 $770,000 $827,000 Minority shareholder's interest $(1,000) $(3,000) $(5,000) $(7,000) Net earnings $790,000 $568,000 $1,338,000 $1,479,000 Net earnings per common share $.29 $.20 $.48 $.53 Weighted average number of common shares outstanding 2,768,499 2,768,499 2,768,499 2,768,499 DATASOURCE: McRae Industries, Inc. CONTACT: D. Gary McRae of McRae Industries, Inc., +1-910-439-6147 Web site: http://www.mcraeindustries.com/

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