1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
FOR THE QUARTER ENDED JANUARY 27, 2001
OR
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
------------- ---------------
COMMISSION FILE NUMBER 1-8578
MCRAE INDUSTRIES, INC
(Exact name of registrant as specified in its charter)
DELAWARE 56-0706710
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
400 NORTH MAIN STREET
MT. GILEAD, NORTH CAROLINA 27306
(Address of principal executive offices)
TELEPHONE NUMBER (910) 439-6147
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter periods that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days:
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
Common Stock, $1 Par Value--Class A 1,861,817 shares as of March 8, 2001.
Common Stock, $1 Par Value--Class B 906,682 shares as of March 8, 2001.
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MCRAE INDUSTRIES, INC. AND SUBSIDIARIES
INDEX
Page No.
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PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheet 3-4
Condensed Consolidated Statement of Operations 5-6
Condensed Consolidated Statement of Cash Flows 7
Notes to Condensed Consolidated Financial Statements 8-9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 10-13
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK 13
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 14
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 14
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 14
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 14
ITEM 5. OTHER INFORMATION 14
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 15
SIGNATURES 15
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PART 1. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MCRAE INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
ASSETS
(In thousands, except share and per share data)
JANUARY 27, 2001 JULY 29, 2000
(UNAUDITED) (NOTE)
---------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 4,759 $ 7,223
Securities 5 61
Accounts and notes receivable, net 8,449 6,594
Inventories (see Note B) 15,176 16,294
Net investment in capitalized leases 578 595
Prepaid expenses and other current assets 231 82
------- -------
Total current assets 29,198 30,849
------- -------
Property, plant and equipment, net 5,424 5,601
Other assets:
Receivables, related entities 577 652
Net investment in capitalized leases 1,219 1,533
Notes receivable 208 306
Real estate held for investment 652 645
Goodwill 490 510
Cash surrender value of life insurance 1,906 1,830
Other 723 775
------- -------
Total other assets 5,775 6,251
------- -------
$40,397 $42,701
======= =======
See notes to condensed consolidated financial statements
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MCRAE INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
LIABILITIES AND SHAREHOLDERS' EQUITY
(In thousands, except share and per share data)
JANUARY 27, 2001 JULY 29, 2000
(UNAUDITED) (NOTE)
---------------- -------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable, banks - current portion $ 247 $ 247
Accounts payable 3,945 4,676
Accrued employee benefits 125 276
Deferred revenues 870 1,039
Accrued payroll and payroll taxes 628 613
Income taxes (314) 478
Contract contingencies 426 426
Estimated loss on discontinuance (see Note C) 475 0
Other 587 574
-------- -------
Total current liabilities 6,989 8,329
-------- -------
Notes payable, banks, net of current portion 4,934 5,057
Minority interest 360 726
Shareholders' equity:
Common stock:
Class A, $1 par; Authorized 5,000,000
shares; Issued and outstanding, 1,859,692 1,860 1,860
and 1,859,692, shares, respectively
Class B, $1 par; Authorized 2,500,000
shares; Issued and outstanding, 908,807
and 908,807 shares, respectively 909 909
Additional paid-in capital 791 791
Retained earnings 24,554 25,029
-------- -------
Total shareholders' equity 28,114 28,589
-------- -------
$ 40,397 $42,701
======== =======
NOTE - The condensed consolidated balance sheet at July 29, 2000 has been
derived from the audited financial statements at that date but does not include
all of the information and footnotes required by generally accepted accounting
principles for complete financial statements.
See notes to condensed consolidated financial statements
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MCRAE INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
JANUARY 27, JANUARY 29, JANUARY 27, JANUARY 29,
2001 2000 2001 2000
------------------------- -------------------------
Net revenues $ 13,835 $ 13,224 $ 30,359 $ 27,402
Costs and expenses:
Cost of revenues 10,543 9,737 23,243 19,849
Research & development 134 135 257 296
Selling, general and
administrative 3,296 2,658 6,566 5,596
Other expense (income),
net (73) (104) (198) (205)
Interest expense 124 98 226 187
-------- -------- -------- --------
Total costs and expenses 14,024 12,524 30,094 25,723
-------- -------- -------- --------
Earnings (loss) from
continuing operations
before income taxes and
minority interest (189) 700 265 1,679
Provision for income taxes (45) 277 144 660
Minority shareholder's
interest in earnings
of subsidiary (2) 8 (3) 16
-------- -------- -------- --------
Net earnings (loss) from
continuing operations (142) 415 124 1,003
See notes to condensed consolidated financial statements
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MCRAE INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
JANUARY 27, JANUARY 29, JANUARY 27, JANUARY 29,
2001 2000 2001 2000
----------------------------- -----------------------------
Discontinued operations:
(See Note C)
Income (loss) from
operations of discontinued
business (43) (33) 43 (75)
Income tax benefit(expense) 17 12 (17) 29
Estimated loss on
disposal of business,
net of income tax benefit
of $185,000 in fiscal 2001 0 0 (290) 0
----------- ----------- ----------- -----------
Net earnings (loss) $ (168) $ 394 $ (140) $ 957
=========== =========== =========== ===========
Net earnings (loss) per
common share-basic:
Earnings (loss) from
continuing operations $ (.05) $ .15 $ .05 $ .36
Discontinued operations (.01) (.01) (.10) (.02)
----------- ----------- ----------- -----------
Net earnings (loss) $ (.06) $ .14 $ (.05) $ .34
=========== =========== =========== ===========
Weighted average number
of common shares
outstanding 2,768,499 2,768,499 2,768,499 2,768,499
----------- ----------- ----------- -----------
See notes to condensed consolidated financial statements
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MCRAE INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
SIX MONTHS ENDED
JANUARY 27, 2001 JANUARY 29, 2000
----------------------------------
Net cash (used in) provided by operating
activities $(1,335) $ 1,207
------- -------
Cash flows from investing activities:
Proceeds from sale of land 9 0
Proceeds from sale of securities 56 2
Purchase of land investment (16) (35)
Purchase of minority interest (363) 0
Proceeds from sales of assets 70 519
Net advances to related parties 75 (6)
Capital expenditures (525) (610)
Purchase of officer life insurance (76) 0
Net collections of long-term receivables 98 161
------- -------
Net cash (used in) provided by investing
activities (672) 31
------- -------
Cash flows from financing activities:
Principal repayments of notes payable (123) (145)
Dividends paid (334) (334)
------- -------
Net cash used in financing activities (457) (479)
------- -------
Net (decrease) increase in cash and cash
equivalents (2,464) 759
Cash and cash equivalents at beginning
of period 7,223 4,705
------- -------
Cash and cash equivalents at end of period $ 4,759 $ 5,464
======= =======
See notes to condensed consolidated financial statements
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MCRAE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
only of normal recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the six months ended January 27, 2001
are not necessarily indicative of the results that may be expected for the year
ending July 28, 2001. For further information, refer to the consolidated
financial statements and footnotes thereto included in the McRae Industries,
Inc., Annual Report on Form 10-K for the year ended July 29, 2000.
Certain reclassifications have been made to the prior year's financial
statements to conform with the current year's presentation.
NOTE B - INVENTORIES
An actual valuation of inventory under the LIFO method can be made only at the
end of each fiscal year based on the inventory levels and costs at that time.
Accordingly, interim LIFO calculations are based on management's estimates of
expected year-end inventory levels and costs. Because these are subject to
forces beyond management's control, interim calculations are subject to change
based on the final year-end LIFO inventory valuation.
The components of inventory consist of the following (in thousands):
JANUARY 27, 2001 JULY 29, 2000
---------------- -------------
Raw materials $ 2,920,000 $ 3,033,000
Work in process 806,000 979,000
Finished goods 11,450,000 12,282,000
----------- -----------
$15,176,000 $16,294,000
=========== ===========
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MCRAE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE C - DISCONTINUED OPERATIONS OF BUSINESS SEGMENT
In August 2000, the Company's management decided to phase out and discontinue
the operations of the printing and packaging business. This business is expected
to complete the fulfillment of current orders and finish normal operations by
March 31, 2001. The collection of accounts receivable and the sale of remaining
inventory and fixed assets is expected to be completed by July 28, 2001. The
assets and liabilities of the printing business as of January 27, 2001 and July
29, 2000 are as follows:
JANUARY 27, 2001 JULY 29, 2000
---------------- -------------
ASSETS
Cash $ 5,000 $ 13,000
Accounts receivable, net 469,000 341,000
Inventories, net 271,000 998,000
Prepaid expenses 2,000 1,000
Fixed assets, net 153,000 170,000
Total Assets 900,000 1,523,000
LIABILITIES
Accounts payable 7,000 57,000
Reserve for discontinuance 475,000 0
Accrued liabilities 0 4,000
Accrued income tax (2,000) (2,000)
Inter-company debt 1,204,000 1,985,000
Total Liabilities 1,684,000 2,044,000
Net assets of discontinued
operations $ (784,000) $ (521,000)
For the quarter ending January 27, 2001, the printing business reported a net
loss of $26,000, net of $17,000 of tax benefit. A reserve for estimated loss on
discontinuance of this business amounted to $290,000, net of $185,000 of tax
benefit. Net earnings per share as a result of the discontinued operations were
reduced by $.01 per share for the second quarter of fiscal 2001 and by $.01 per
share for the same period of fiscal 2000. The results of the printing and
packaging business operations have been reported separately as discontinued
operations in the Condensed Consolidated Statement of Operations.
Prior year financial statements for fiscal 2000 have been restated to present
the operations for the printing and packaging business as a discontinued
operation.
NOTE D - SUBSEQUENT EVENTS
On February 27, 2001, the Company declared a cash dividend of $.05 cents per
share on its Class A Common Stock payable on March 30, 2001, to shareholders of
record on March 16, 2001.
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MCRAE INDUSTRIES, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the attached
unaudited condensed consolidated financial statements and notes thereto, and
with the Company's Annual Report on Form 10-K for the fiscal year ended July 29,
2000, including the financial information and management's discussion and
analysis contained or incorporated by reference therein.
FINANCIAL CONDITION AND LIQUIDITY
The Company's financial condition remained strong for the period ending January
27, 2001. Working capital amounted to approximately $22.2 million and cash and
cash equivalents totaled almost $4.8 million.
Cash used in operating activities amounted to approximately $1.3 million. Net
income from operations, adjusted for depreciation and amortization, contributed
approximately $582,000. Accounts and notes receivable used approximately $1.8
million of cash primarily as a result of increased sales of military and western
boots and the timing of collection of larger quarter-end billings associated
with the office products business. The decline in inventories provided a
positive cash flow of approximately $1.1 million primarily attributable to the
discontinuance of the printing business, greater sales of military combat boots
and decreased purchases of duplicating equipment for the office products
business. Accounts payable used approximately $731,000 of cash as a result of
the office products business using approximately $1.0 million to pay for
inventory that was purchased during the last quarter of fiscal 2000. This use of
cash was partially offset by the timing of payment for inventory purchases for
the military combat boot business and the western boot business of approximately
$202,000 and $233,000, respectively. Income taxes used approximately $792,000 of
cash as prior year taxes and first quarter estimates were paid.
Capital expenditures for the current period amounted to approximately $525,000
and consisted primarily of rental equipment used in county-wide government and
school systems and office computers and equipment. Advances to related parties
used $75,000 of cash to pay for land development costs. Proceeds from the sale
of various printing equipment, securities, and investment property provided
approximately $135,000 of cash. The purchase of additional minority interest
related to the bar code business used approximately $360,000 of cash.
The Company used $334,000 of cash to pay quarterly dividends and $123,000 to
reduce the principal amount of long-term debt.
The Company currently has two lines of credit with a bank totaling $2.75
million, all of which was available at January 27, 2001. It is management's
opinion that the future cash flows from operations, currently available cash and
cash equivalents, and unused lines of credit will be sufficient to meet the
Company's future working capital, capital expenditures, and debt repayment
requirements.
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SECOND QUARTER FISCAL 2001, COMPARED TO SECOND QUARTER FISCAL 2000
Consolidated net revenues from continuing operations for the second quarter of
fiscal 2001 amounted to $13.8 million, an increase of 4.5% over the $13.2
million reported for the second quarter of fiscal 2000. This increase in net
revenues was primarily attributable to the military boot and western boot
businesses that reported net revenues of $4.4 million and $2.1 million,
respectively, for the second quarter of fiscal 2001 as compared to $2.7 million
and $1.6 million, respectively, for the same period of fiscal 2000. This
improvement in net revenues resulted from higher military boot requirements by
the U. S. Government, greater demand for military boots by foreign governments,
and increased market penetration in the western boot market. The office products
and bar code businesses experienced a combined decrease in net revenues for the
comparative second quarters of fiscal 2001 and 2000 of 21.9% and 11.9%,
respectively, as competitive pressures in the related markets intensified.
Consolidated gross profit from continuing operations for the second quarter of
fiscal 2001 amounted to $3.3 million, down 5.7% from the $3.5 million reported
for the second quarter of fiscal 2000. Gross profit as a percentage of net
revenues fell from 26.4% for the second quarter of fiscal 2000 to 23.8% for the
second quarter of fiscal 2001. Gross profit for the footwear business increased
from $660,000 for the second quarter of fiscal 2000 to $1.2 million for the
second quarter of fiscal 2001, primarily attributable to greater demand for
military and western boots and lower per unit costs associated with higher
western boot production levels. The gross profit for the bar code unit declined
21.9% for the comparative second quarters of fiscal 2001 and 2000, primarily as
a result of lower product sales and costs attributable to the software
application and services product. The office products business gross profit
decreased from $1.4 million for the second quarter of fiscal 2000 to $1.0
million for the second quarter of fiscal 2001, primarily attributable to lower
overall product sales, decreased sales to commercial markets, and higher service
costs.
Selling, general and administrative (SG&A) expenses from continuing operations
for the second quarter of fiscal 2001 were up 24.0% from the $2.7 million
reported for the second quarter of fiscal 2000. This increase in SG&A expenses
was primarily attributable to higher expenditures related to sales salaries,
sales commissions, advertising and administrative salaries for the western boot
and office products businesses, and group health insurance costs. These
increased expenditures were partially offset by reduced employee benefit costs
and professional services. As a percentage of net revenues, SG&A expenditures
increased from 20.1% for the second quarter of fiscal 2000 to 23.8% for the
second quarter of fiscal 2001.
The Company's military footwear business is currently in the fourth year of the
most recent contract (the Contract) awarded by the United States Government (the
Government) in April 1997. The Contract provides for a base year and four
one-year extensions that may be exercised by the Government at its sole
discretion for the purchase of additional option quantities of military combat
boots. The current option will expire in April 2001; however, the Company has
received notification that the Government intends to invoke the final year's
option. In addition, the Government has indicated it will switch to a new type
of military combat boot and has issued a solicitation for bids. While the
Company has positioned itself to manufacture the new type of military combat
boots and continues to manufacture boots for the Contract option, there are no
assurances that the Government will order any boots under the option or that the
Company will be successful in the solicitation of the contract right to
manufacture the new type of military boot.
In August 2000, the Company's management decided to phase out the operation of
the printing and packaging business. Net revenues for the second quarter of
fiscal 2001 were $644,000 as compared to $648,000 for the same period of fiscal
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2000. Operating losses of $26,000 and $21,000 were recorded for the second
quarters of fiscal 2001 and fiscal 2000, respectively.
FIRST SIX MONTHS FISCAL 2001, COMPARED TO FIRST SIX MONTHS FISCAL 2000
Consolidated net revenues from continuing operations for the first six months of
fiscal 2001 amounted to $30.4 million, an increase of 10.8% over the
consolidated net revenues from continuing operations for the same period of
fiscal 2000. The military boot business net revenues for the first six months of
fiscal 2001 increased 81.4% over the $5.1 million reported for the same period
of fiscal 2000. This increase in net revenues was primarily the result of higher
U. S. Government requirements and greater demand by foreign governments for
combat boots. Net revenues from the western boot business reached $4.7 million
for the first six months of fiscal 2001, an increase of 14.6% over the $4.1
million reported for the same period of fiscal 2000 and was primarily the result
of the successful implementation of various sales and marketing strategies which
included broader market coverage with a highly professional sales team and the
introduction of foreign manufactured western boots to the market. The bar code
and office products businesses experienced net revenue reductions for the
comparative six-month periods of fiscal 2001 and 2000 of 13.6% and 6.7%,
respectively. These decreases in net revenues were primarily attributable to
increased competitive pressures in the respective markets.
Consolidated gross profit from continuing operations decreased from $7.5 million
reported for the first six months of fiscal 2000 to $7.1 million for the first
six months of fiscal 2001. Gross profit as a percentage of net revenues
decreased from 27.6% for the first six months of fiscal 2000 to 23.4% for the
same period of fiscal 2001. Gross profit for the footwear business climbed to
$3.0 million for the first six months of fiscal 2001, an increase of 74.5% over
the $1.7 million reported for the first six months of fiscal 2000. This increase
in gross profit resulted primarily from greater demand for military and western
boots and to lower per unit costs associated with higher western boot production
levels. Gross profit for the bar code business decreased from $3.0 million
reported for the first six months of fiscal 2000 to $2.2 million for the first
six months of fiscal 2001 and primarily resulted from lower product sales and
costs associated with the software application and services product. The office
products business experienced a 28.4% decline in gross profit for the
comparative six-month periods of fiscal 2001 and 2000, primarily attributable to
reduced sales to high-margin commercial customers.
Selling, general and administrative (SG&A) expenses for the first six months of
fiscal 2001 amounted to $6.6 million, an increase of 17.9% over the $5.6 million
reported for the first six months of fiscal 2000. As a percentage of net
revenues, SG&A expenses increased from 20.4% for the first six months of fiscal
2000 to 21.6% for the same period of fiscal 2001. The increase in SG&A
expenditures was primarily the result of higher sales salaries, sales
commissions, administrative salaries, advertising, and group health insurance
costs. These higher costs were partially offset by lower expenditures for
employee benefit costs and professional fees.
Net revenues related to the discontinued printing and packaging business for the
first six months of fiscal 2001 amounted to $1.4 million as compared to $1.3
million reported for fiscal 2000. An operating profit of $26,000 was reported
for the current fiscal period as compared to a $46,000 loss for the same period
of fiscal 2000. An estimated loss on the discontinuance of this business
amounting to $290,000, net of the tax benefit, was reserved in the first quarter
of fiscal 2001. This business is expected to complete the fulfillment of current
orders and finish normal operations by March 31, 2001. The collection of
accounts receivable and the sale of remaining inventory and fixed assets is
expected to be completed by July 28, 2001.
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IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
In June 1998, SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities", was issued and established the accounting and reporting standards
for derivative instruments and hedging activities. SFAS No. 133 will be
effective for the Registrant for the fiscal year beginning July 30, 2000, as
amended by SFAS No. 137. Currently, the Registrant is not involved in any
derivative or hedging activities.
In December 1999, SAB 101, "Revenue Recognition in Financial Statements" was
issued and established accounting and reporting standards for the determination
of when a sale occurs and how the revenue should be recognized for financial
reporting. SAB 101 is effective for the Registrant no later than the fourth
fiscal quarter of the fiscal year ending July 28, 2001, as amended by SAB 101B.
Adoption of this standard will not have a material impact on the Registrant's
revenue recognition policies.
FORWARD-LOOKING STATEMENTS
In addition to historical information, this Interim Report includes certain
forward-looking statements as such term is defined in Section 27A of the
Securities Act and Section 21E of the Exchange Act of 1934, as amended. These
forward-looking statements involve certain risks and uncertainties, including
but not limited to acquisitions, additional financing requirements, development
of new products and services, the effect of competitive products and pricing,
acceptance of new footwear products in the market place, risks unique to selling
goods to the Government (including termination of the Contract, failure to
exercise the next option period under the Contract or reducing purchases), and
the effect of general economic conditions, that could cause actual results to
differ materially from those in such forward-looking statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to the impact of interest rate changes due to its
aggregate $2.75 million lines of credit and a term loan through its wholly owned
subsidiary, American West Trading Company. As of January 27, 2001, there was no
outstanding indebtedness under the lines of credit and $4.9 million was
outstanding on the term loan. The Company does not buy or sell derivative
financial instruments for trading purposes. Borrowings under the Company's
credit facilities described above bear interest at rates based upon the "Prime
Rate" or "Prime Rate" less a margin of one-half percent offered by the
applicable lender. The Company has not entered into any swap agreements or
engaged in any other hedging activities with respect to this variable rate
indebtedness. A 10% increase in the interest rates under the Company's credit
facilities would increase annual interest expense by approximately $45,000
(assuming the Company's aggregate borrowings under the credit facilities
averaged $5.0 million during a fiscal year).
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PART 2. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
While the Registrant and its subsidiaries are engaged in litigation from time to
time in the ordinary course of business incidental to their respective
operations, management does not believe that any such litigation is likely to
have a material adverse effect on the Registrant's consolidated financial
position or operations
ITEMS 2 AND 3.
These items are not applicable and have been omitted.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Company's Annual Meeting of Shareholders held on December 14, 2000, the
following individuals were elected to the Board of Directors:
VOTES FOR VOTES WITHHELD
CLASS A CLASS B CLASS A CLASS B
------------------------- ----------------------
D. Gary McRae N/A 856,846 N/A 2,228
George M. Bruton N/A 856,846 N/A 2,228
Hilton J. Cochran N/A 856,846 N/A 2,228
Victor A. Karam N/A 856,846 N/A 2,228
James W. McRae N/A 856,846 N/A 2,228
Brady W. Dickson 1,758,523 N/A 7,740 N/A
Harold W. Smith 1,759,223 N/A 7,040 N/A
The following proposal was approved at the Company's Annual Meeting:
AFFIRMATIVE VOTES NEGATIVE VOTES VOTES WITHHELD
CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B
------------------------------------------------------------
Ratify the appointment
of Gleiberman Spears
Shepherd & Menaker, P.A.
as independent certified
public accountants for
the current fiscal year. 1,755,238 859,061 7,770 0 1,325 13
ITEM 5.
This item is not applicable and has been omitted.
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3.1 Certificate of Incorporation (Incorporated by reference to
Exhibit 3.1 to the Registrant's Form S-14, Registration No.
2-85908).
3.2 Amendment to the Certificate of Incorporation (Incorporated by
reference to Exhibit 3 to the Registrant's Form 10-K for the
fiscal year ended August 1, 1987).
3.3 Amendment to the Bylaws of the Registrant effective September
10, 1993 (Incorporated by reference to Exhibit 3.3 to the
Registrant's Form 10-K for the fiscal year ended July 31,
1993).
3.4 Restated Bylaws of the Registrant (Incorporated by reference
to Exhibit 3.4 to the Registrant's Form 10-K for the fiscal
year ended July 31, 1993).
3.5 Amendment to Bylaws (Incorporated by reference to Exhibit 3.5
to the Registrant's Form 10-K for the fiscal year ended July
29, 2000).
(b) No reports on Form 8-K were filed during the quarter ended January 27,
2001.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MCRAE INDUSTRIES, INC.
(Registrant)
DATE: March 13, 2001 By: /s/D. Gary McRae
---------------- -----------------------
D. Gary McRae
President and CEO
(Principal Executive Officer)
DATE: March 13, 2001 By: /s/Marvin G. Kiser, Sr.
---------------- -----------------------
Marvin G. Kiser,
Sr. (Principal Accounting Officer)
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