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McRae Industries Extends Boot Contract

From: ASAP

Comments

McRae Industries, Inc. (AMEX: MRIA) (AMEX: and) (AMEX: MRIB) reported that the Company's military combat boot contract with the U.S. Government (the "Government") originally scheduled to expire on April 15, 2002 has been extended for the second time covering an ordering period from September 30, 2002 through December 30, 2002. The contract extension provides for a maximum order quantity of military combat boots of 80,000 pair and a minimum order quantity of 45,525 pair consisting of the three (3) current styles of direct molded sole (DMS) boots covered in the contract. These boots are scheduled for delivery during the Company's second and third quarters of fiscal 2003 and will have an approximate $5 million impact on revenues if the maximum quantity of boots is ordered by the Government. Revenues at the minimum order quantity will approximate $2.8 million.

The Company has submitted bid responses to two different military combat boots solicitations by the Government which have been delayed and are undergoing bid review, One of the solicitations is for combat boots we manufacture under the current contract and the other solicitation is for newly designed infantry combat boot that requires a waterproof membrane. There are no assurances that the Company will be successful in obtaining contracts against either of these solicitations to produce military combat boots for the Government. The Company's operating results could be adversely affected if it is not successful in obtaining these contracts.

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. These forward-looking statements involve certain risks and uncertainties unique to selling goods to the Government (including the impact of the war on terrorism, changes in type of military boots used by the Government, and termination of the Contract) that could cause actual results to differ materially from those in such forward-looking statements.

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