McRae Industries, Inc. Announces Review of Its Inventory and Expected Restatement of Financial Statements for Fiscal Year Ended
December 07 2004 - 4:34PM
PR Newswire (US)
McRae Industries, Inc. Announces Review of Its Inventory and
Expected Restatement of Financial Statements for Fiscal Year Ended
July 31, 2004 MOUNT GILEAD, N.C., Dec. 7 /PRNewswire-FirstCall/ --
McRae Industries, Inc. (Amex: MRIA; MRIB) announced today that it
is conducting a review of its previously reported financial
statements for the fiscal year ended July 31, 2004 as a result of
clerical errors in the calculation of inventory discovered by
management at the company's military boot unit. Management
presented its findings to the company's Audit Committee and is
continuing to examine the company's accounting for inventory.
Although the review is continuing, the company's preliminary
assessment indicates that its inventory was overstated and the
related cost of revenues was understated by approximately
$1,044,000 for the fiscal year ended July 31, 2004. In its Form
10-K for the fiscal year ended July 31, 2004, the company reported
total inventory of $15,739,000 and total cost of revenues of
$54,563,000. Accordingly, the company expects to restate its
previously reported financial statements for the fiscal year ended
July 31, 2004. Based on this preliminary assessment, the company
expects net earnings from continuing operations will be
approximately $3,128,000 for the fiscal year ended July 31, 2004,
as opposed to net earnings from continuing operations of $3,740,000
as previously reported. The company's assessment of the
misstatement is preliminary, and revisions to the amount could
arise as a result of the ongoing review. The company believes that
the overstatement of inventory resulted from clerical errors in the
year-end calculation of inventory and that it has identified and
corrected the errors. The company's previously reported financial
statements for the fiscal year ended July 31, 2004 should no longer
be relied upon pending the outcome of the review. As soon as
practicable following the completion of the review, the company
will amend its Annual Report on Form 10-K for the fiscal year ended
July 31, 2004 previously filed with the Securities and Exchange
Commission to reflect the expected restatement. The company does
not expect to be able to file its Form 10-Q for the first quarter
of fiscal 2005, which is due on December 14, 2004, until it has
completed its review of the accounting for inventory in the
financial statements for fiscal 2004. As a result, the Company
expects to file a Form 12b-25 Notification of Late Filing with
respect to such Form 10-Q. The Company has notified and discussed
this matter with its independent registered public accounting firm.
In addition to historical information, this Press Release includes
certain forward-looking statements as such term is defined in
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. 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 results of the ongoing review, the impact
of the expected restatement and the reaction of the company's
stockholders, customers, vendors and lenders to the review and
anticipated restatement. 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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