McRae Industries, Inc. reported consolidated net revenues for the first quarter of fiscal 2010 of $17,041,000 as compared to $20,334,000 for the first quarter of fiscal 2009. Net earnings for the first quarter of fiscal 2010 amounted to $1,037,000, or $.49 per diluted Class A common share as compared to net earnings of $1,212,000, or $.55 per diluted Class A common share, for the first quarter of fiscal 2009.
First Quarter Fiscal 2010 Compared To First Quarter Fiscal 2009
Consolidated net revenues for the first quarter of fiscal 2010 amounted to $17.0 million as compared to $20.3 million for the first quarter of fiscal 2009. The decline in net revenues was primarily attributable to reduced military boot requirements by the U. S. Government and to the diminished scope of the bar code business. The decline was partially offset by strong seasonal demand for western boot products.
Consolidated gross profit totaled $5.4 million for the first quarter of fiscal 2010 as compared to $6.0 million for the first quarter of fiscal 2009. The decrease in gross profit was the result of the decline in net revenues and lower profit margins for the military boot and bar code business units.
Consolidated selling, general and administrative ("SG&A") expenses were $3.7 million for the first quarter of fiscal 2010 as compared to $4.1 million for the first quarter of fiscal 2009. The reduction in SG&A expenses resulted primarily from the downsizing of the bar code business, which was partially offset by increased expenditures for sales salaries, commissions, and employee benefits charges associated with the western and work boot business.
As a result of the above, the consolidated operating profit for the first quarter of fiscal 2010 amounted to $1.7 million as compared to $2.0 million for the first quarter of fiscal 2009.
Military Boot Business
Net revenues totaled $2.6 million for the military boot business for the first quarter of fiscal 2010, down from $3.5 million for the first quarter of fiscal 2009 as a result of decreased military combat boot requirements under both of our current U. S. Government (the "Government") contracts. In an effort to expand our revenue base, we continue to submit bids on other Government military boot solicitations, and we have expanded our efforts to sell military boot products in the commercial market.
Gross profit fell from $503,000 for the first quarter of fiscal 2009 to a gross loss of $15,000 for the first quarter of fiscal 2010. The decline in gross profit was attributable to reduced net revenues and significantly lower profit margins, which resulted from decreased production levels and labor inefficiencies associated with a new military boot construction.
SG&A expenses amounted to $160,000 for the first quarter of fiscal 2010 as compared to $195,000 for the first quarter of fiscal 2009. The decline in SG&A expenses was the result of lower corporate allocated charges.
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