Exhibit 99.1
| Company Contact:
Lawrence L. Spanley, Jr.
Chief Financial Officer
(314) 621-0699 |
| |
| Investor Contact:
Integrated Corporate Relations
Allison Malkin/Jean Fontana
(203) 682-8225 / (203) 682-8272 |
BAKERS FOOTWEAR REPORTS SECOND QUARTER AND
FIRST HALF FISCAL 2006 RESULTS
ST. LOUIS, Mo., September 8, 2006 – Bakers Footwear Group, Inc. (Nasdaq: BKRS), a leading specialty retailer of moderately priced fashion footwear for young women, today announced results for the thirteen and twenty-six weeks ended July 29, 2006.
For the second quarter, the thirteen weeks ended July 29, 2006:
| • | Net sales increased 4.3%, to $47.2 million from $45.3 million for the thirteen weeks ended July 30, 2005. Comparable store sales decreased 6.4% compared to a 12.7% increase last year; |
| • | Operating loss was $1.5 million, a decrease of $3.5 million from operating income of $2.0 million, in the same period a year ago; |
| • | Net loss was $1.0 million, or $(0.16) per share, as compared to net income of $1.2 million, or $0.19 per diluted share in the second quarter of 2005; and |
| • | As a result of adopting FAS 123R, the Company recognized $0.02 per share related to stock based compensation expense in the second quarter of 2006. The Company recognized no stock-based compensation expense in the second quarter of 2005. |
“We were disappointed with our second quarter results, which were affected by challenging sandal sales, a significant product category that gains importance during the spring and summer seasons. This led to lower than expected sales and higher markdowns during the quarter, as we cleared seasonal inventory. On a positive note, since introducing our fall line in mid-August, our sales have improved and we are very pleased with the performance of our fall product.”
Additionally, during the second quarter, the Company:
| • | Opened 4 new stores and at quarter-end operated 247 stores in 38 states; and |
| • | Remodeled 4 stores and at quarter-end operated 143 stores, or 65% of its Bakers stores in the new store format; |
Gross profit in the second quarter was $13.5 million, or 28.6% of net sales, compared to $15.0 million, or 33.1% of net sales, in the second quarter of fiscal 2005. Operating expenses were $15.0 million, or 31.8% of net sales compared to $13.0 million, or 28.7% of net sales in the second quarter of fiscal 2005.
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For the first half of fiscal 2006, the twenty-six weeks ended July 29, 2006:
| • | Net sales increased 7.5%, to $97.0 million from $90.2 million for the twenty-six weeks ended July 30, 2005. Comparable store sales decreased 3.6% compared to a 10.1% increase last year; |
| • | Operating loss was $0.3 million, as compared to operating income of $5.1 million, in the same period a year ago; |
| • | Net loss was $0.4 million or $(0.06) per share, as compared to net income of $3.1 million, or $0.51 per diluted share in the second half of 2005. |
| • | As a result of adopting FAS 123R, the Company recognized $0.04 per share related to stock based compensation expense in the first half of fiscal 2006. The Company recognized no stock-based compensation expense in the first half of fiscal 2005. |
Gross profit in the first half of fiscal 2006 was $29.8 million, or 30.7% of net sales, compared to $30.4 million, or 33.7% of net sales, in the first half of fiscal 2005. Operating expenses were $30.1 million, or 31.0% of net sales compared to $25.3 million, or 28.1% of net sales in the first half of fiscal 2005.
Michele Bergerac, President of Bakers Footwear, said, “As a fashion footwear retailer, the disappointing performance in the sandal category of our business had a significant impact on our spring and summer sales. However, we are very optimistic about the fall season having identified several new fashion trends such as platforms, round toe pumps and peep toe shoes, as well as a variety of boot styles that we believe will enable us to improve our sales performance during the balance of the year. We also remain on track to open 33 or 34 stores this year and remodel approximately 15 stores to our new formats.”
Mr. Edison continued: “As we move into the second half of the year, we are encouraged about the fall season. We remain confident that our initiatives in merchandising and marketing, combined with our new store expansion have us poised for long term sales and earnings growth.”
Following the end of the quarter the Company announced that it had amended its credit facility with Bank of America increasing the maximum credit limit to $40 million from $25 million and extended the maturity by two years to August 31, 2010.
Commenting on the announcement, Mr. Edison stated, “We are pleased to have amended the credit agreement, as it provides us with increased financial flexibility and lengthens the maturity on our short term debt by two years. This agreement is a reflection of our growth to date and better positions us to capitalize on the expansion opportunities that exist for our Company.”
Conference Call
The Company announced that it will conduct a conference call to discuss its second quarter and first six month of fiscal 2006 results today, Friday, September 8, 2006 at 9:00 a.m. Eastern Time. Investors and analysts interested in participating in the call are invited to dial (800) 811-0667, approximately five minutes prior to the start of the call. The conference call will also be web-cast live at http://viavid.net/dce.aspx?sid=00003511. A replay of this call will be available until September 15, 2006 and can be accessed by dialing (888) 203-1112 and entering code 6180454. The web-cast will be available until October 8, 2006 at the same web address.
About Bakers Footwear Group, Inc.
Bakers Footwear Group is a national, mall-based, specialty retailer of distinctive footwear and accessories for young women. The Company’s merchandise includes private label and national brand dress, casual and sport shoes, boots, sandals and accessories. The Company currently operates more than 240 stores nationwide under two formats, Bakers and Wild Pair. Bakers stores focus on women between the ages of 16 and 35. Wild Pair stores offer fashion-forward footwear to both women and men between the ages of 17 and 29.
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THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS (WITHIN THE MEANING OF SECTION 27(A) OF THE SECURITIES ACT OF 1933 AND SECTION 21(E) OF THE SECURITIES EXCHANGE ACT OF 1934). BAKERS FOOTWEAR HAS NO DUTY TO UPDATE SUCH STATEMENTS. ACTUAL FUTURE EVENTS AND CIRCUMSTANCES COULD DIFFER MATERIALLY FROM THOSE SET FORTH IN THIS STATEMENT DUE TO VARIOUS FACTORS. FACTORS THAT COULD CAUSE THESE CONDITIONS NOT TO BE SATISFIED INCLUDE MATERIAL CHANGES IN CAPITAL MARKET CONDITIONS OR IN BAKERS FOOTWEAR’S BUSINESS, PROSPECTS, RESULTS OF OPERATIONS OR FINANCIAL CONDITION AND OTHER RISKS AND UNCERTAINTIES, INCLUDING THOSE DETAILED IN BAKERS FOOTWEAR’S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION.
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BAKERS FOOTWEAR GROUP, INC. Income Statement Data | Thirteen
Weeks
Ended
July 29, 2006 | Thirteen
Weeks
Ended
July 30, 2005 | Twenty-six
Weeks
Ended
July 29, 2006 | Twenty-six
Weeks
Ended
July 30, 2005 |
(in thousands except per share data) | Unaudited | Unaudited | Unaudited | Unaudited |
| | | | |
Net sales | $ 47,185 | $ 45,255 | $ 96,989 | $ 90,199 |
Cost of merchandise sold, occupancy, and buying
expenses | 33,674 | 30,272 | 67,181 | 59,809 |
Gross profit | 13,511 | 14,983 | 29,808 | 30,390 |
| | | | |
Operating expenses: | | | | |
Selling | 10,675 | 9,127 | 21,074 | 17,754 |
General and administrative | 4,198 | 3,792 | 8,896 | 7,349 |
Loss on disposal of property and equipment | 113 | 58 | 128 | 198 |
Operating income (loss) | (1,475) | 2,006 | (290) | 5,089 |
| | | | |
Other income (expense): | | | | |
Interest expense | (184) | (87) | (297) | (213) |
Other, net | 11 | 66 | 34 | 102 |
Income (loss) before income taxes | (1,648) | 1,985 | (553) | 4,978 |
| | | | |
Provision for (benefit from) income taxes | (622) | 762 | (195) | 1,903 |
| | | | |
Net income (loss) | $ (1,026) | $ 1,223 | $ (358) | $ 3,075 |
| | | | |
Basic earnings (loss) per share | $ (0.16) | $ 0.20 | $ (0.06) | $ 0.54 |
| | | | |
Diluted earnings (loss) per share | $ (0.16) | $ 0.19 | $ (0.06) | $ 0.51 |
| | | | |
Weighted average shares outstanding | | | | |
Basic | 6,493 | 6,146 | 6,413 | 5,745 |
Diluted | 6,493 | 6,384 | 6,413 | 5,990 |
| | | | |
Cash Flow Data | | | | |
Cash provided by (used in) operating activities | | | $ (2,326) | $ 4,458 |
Cash used in investing activities | | | (10,719) | (10,664) |
Cash provided by financing activities | | | 9,312 | 7,172 |
| | | | |
Supplemental Data | | | | |
Comparable store sales increase (decrease) | (6.4%) | 12.7% | (3.6%) | 10.1% |
Gross profit percentage | 28.6% | 33.1% | 30.7% | 33.7% |
Number of stores at end of period | | | 247 | 225 |
| | | | |
Balance Sheet Data | | | July 29, 2006 | July 30, 2005 |
| | | Unaudited | Unaudited |
Cash | | | $ 192 | $ 2,397 |
Accounts receivable | | | 2,138 | 2,044 |
Inventories | | | 26,268 | 21,530 |
Other current assets | | | 3,135 | 3,835 |
Current assets | | | 31,733 | 29,806 |
| | | | |
Property and equipment, net | | | 45,773 | 29,862 |
Other assets | | | 1,386 | 528 |
| | | $ 78,892 | $ 60,196 |
| | | | |
Current liabilities | | | $ 28,959 | $ 18,107 |
Noncurrent liabilities | | | 7,884 | 6,026 |
Shareholders’ equity | | | 42,049 | 36,063 |
| | | $ 78,892 | $ 60,196 |
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