McRae Industries, Inc. reported revenues for fiscal 2011 of $74.7 million as compared to $62.6 million for fiscal 2010. Net earnings for fiscal 2011 totaled $3.8 million as compared to $3.0 million for fiscal 2010. Net earnings per diluted Class A common share were $1.84 for fiscal 2011 as compared to $1.47 for fiscal 2010.
Consolidated net revenues for fiscal 2011 totaled approximately $74.7 million as compared to $62.6 million for fiscal 2010. This 19.3 percent growth in net revenues was primarily attributable to increased work boot sales, which grew from $21.8 million for fiscal 2010 to $31.2 million for fiscal 2011 as all product lines showed improvement, especially its military boot business which recorded an 84 percent increase over fiscal 2010 primarily attributable to an additional U.S. Government contract.
Net revenues related to its western/lifestyle footwear products, which includes its three primary branded lines and its children's boot products grew from $42.2 million for fiscal 2010 to $43.2 million for fiscal 2011 as demand for these products remained strong. Net revenues associated with its bar code business, most of which was sold at the end of March 2009, totaled $157,000 for fiscal 2011 as compared to $478,000 for fiscal 2010. For fiscal 2012, the company said it continues to be optimistic that the demand for its western/lifestyle products will remain strong and that an improving economy will have a positive impact on its non-military work boot business. The company said it expects fiscal 2012 to be a challenging year for our military boot business as we contend with the Government's overstock position and the culmination of several of our military boot contracts, which will not be replaced until the last half of fiscal 2012, if we are successful in acquiring the business. Revenues from the bar code business will continue to decrease as this business phases out.
Consolidated gross profit for fiscal 2011 amounted to $20.7 million as compared to $18.3 million for fiscal 2010, primarily the result of increased net revenues and slightly higher margins on its western/lifestyle product sales. Gross profit for the western/lifestyle products increased from $14.4 million for fiscal 2010 to $15.8 million for fiscal 2011. Gross profit for our work boot products grew from $3.6 million for fiscal 2010 to $4.6 million for fiscal 2011, primarily the result of the increase in military boot sales.
Consolidated selling, general and administrative (“SG&A”) expenses increased from $13.7 million for fiscal 2010 to $14.6 million for fiscal 2011, primarily the result of higher support costs associated with the increase in net revenues. Increased expenditures for sales related compensation, facility rental expense, travel costs, administrative salaries, group health insurance, employee benefit costs and bad debt write-offs were partially offset by reduced outlays for professional services and computer related services.
As a result of the above, consolidated operating profit for fiscal 2011 totaled approximately $6.1 million as compared to $4.6 million for fiscal 2010.
FINANCIAL CONDITION AND LIQUIDITY
At July 30, 2011, our financial condition and liquidity remained strong as cash and cash equivalents totaled $10.3 million as compared to $9.9 million at July 31, 2010. Working capital increased from $33.9 million at July 31, 2010 to $36.6 million at July 30, 2011.
The company currently have two lines of credit with a bank totaling $6.75 million, all of which were fully available at July 30, 2011. 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 2012. The $5.0 million line of credit, which expires in March 2012, is secured by the inventory and accounts receivable of our Dan Post Boot Company subsidiary.
The company said it believes that its current cash and cash equivalents, cash generated from operations, and available credit lines will be sufficient to meet our capital requirements for fiscal 2012.
Net cash provided by operating activities for fiscal 2011 amounted to approximately $2.2 million. Net earnings, as adjusted for depreciation, contributed approximately $4.6 million of cash. The increase in accounts receivable used approximately $510,000 of cash as a result of the timing of collection for heavier fourth quarter sales. The normal fourth quarter inventory buildup for the fall selling season for our western/work boot unit used approximately $1.4 million of cash. The reduction in accounts payable used approximately $821,000 and was primarily attributable to the timing of inventory payments.
Net cash used in investing activities totaled approximately $1.0 million. Proceeds from the sale of fixed assets provided $126,000 of cash. Capital expenditures, primarily for military boot manufacturing equipment, moulds for the western/work boot business, office furniture and computer-related equipment, used $822,000 of cash. Land development costs used approximately $258,000 of cash.
Net cash used in financing activities totaled approximately $954,000. Dividend payments totaled $739,000 and the repurchase of company stock used approximately $215,000 of cash.
