Bakers Footwear Reports First Quarter Fiscal 2007 Results

  
    
  
  
    
      Bakers Footwear Group, Inc. (Nasdaq: BKRS), a leading specialty 
      retailer of moderately priced fashion footwear for young women, with 258 
      stores, today announced results for the thirteen weeks ended May 5, 2007.
    
    
      For the first quarter, the thirteen weeks ended May 5, 2007:
    
    
      
        Net sales were $49.3 million, compared to $49.8 million for the 
        thirteen-week period ended April 29, 2006. Comparable store sales for 
        the first quarter of fiscal 2007 decreased 9.3%, compared to a 
        decrease of 0.8% in the prior-year period;
      
      
        Gross profit in the first quarter was $15.3 million, or 31.0% of net 
        sales, compared to $16.3 million, or 32.7% of net sales in the first 
        quarter last year;
      
      
        Operating loss was $1.2 million, compared to operating income of $1.2 
        million in the first quarter last year; and
      
      
        Net loss was $1.0 million or $0.15 per share, compared to net income 
        of $0.7 million, or $0.10 per diluted share in the first quarter last 
        year.
      
    
    
      Peter Edison, Chairman and Chief Executive Officer of Bakers Footwear 
      Group said, “Our first quarter performance 
      reflected a lack of enthusiasm for our fashion footwear by our core 
      customers and an unfavorable response to our spring assortments across 
      our key fashion categories. On a positive note, we did achieve our 
      inventory goals. At quarter end, inventory declined 1.4% from last year 
      despite adding 13 net new stores since the first quarter of fiscal 2006.”
    
    
      During the first quarter of fiscal 2007, the Company opened six new 
      stores in the new Bakers format and remodeled four Bakers locations, 
      ending the quarter with 258 total stores.
    
    
      Mr. Edison continued: “Our second quarter 
      sales continue to be soft, with comparable store sales in May down 
      15.1%. We hope to show improvement in the fall season, as our efforts to 
      provide compelling fall/holiday assortments while maintaining tight 
      management of inventory and expenses bear fruit.”
    
    
      Fiscal 2007 Outlook
    
    
      The Company currently estimates fiscal 2007 EBITDA to be approximately 
      $5.5 million to $8.0 million, compared to actual fiscal 2006 EBITDA of 
      $6.1 million. EBITDA is a non-GAAP measure. See Table 1 below for a 
      reconciliation of net loss to EBITDA and a discussion regarding the use 
      of EBITDA. The Company anticipates a net loss for fiscal 2007 in the 
      range of $1.6 million to $3.3 million and a net loss per share in the 
      range of $0.24 to $0.50. This compares to a net loss of $1.5 million and 
      a net loss per share of $0.24 in fiscal 2006.
    
    
      Store Opening Plans
    
    
      During fiscal 2007, the Company expects to open between 8 to 10 new 
      stores, including stores opened in the first quarter.
    
    
      Private Placement
    
    
      By separate press release, the Company also announced today the entry 
      into an agreement with private investors relating to a private placement 
      transaction.
    
    
      Conference Call
    
    
      The Company also announced that it will conduct a conference call to 
      discuss its first quarter fiscal 2007 results today, Tuesday, June 19, 
      2007 at 9:00 a.m. Eastern Daylight Time. Investors and analysts 
      interested in participating in the call are invited to dial (888) 
      868-9083, 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=000040E6. 
      A replay of this call will be available until June 26, 2007 and can be 
      accessed by dialing [phone] and entering code 8916582. The 
      web-cast will remain available until July 19, 2007 at the same web 
      address.
    
    
      About Bakers Footwear Group, Inc.
    
    
      Bakers Footwear Group, Inc. 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 over 250 stores nationwide. 
      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.
    
    
      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.
    
    
      
        
          Bakers Footwear Group, Inc.

          
             
          
          
             
          
          
            Income Statement Data
          
        
        
           
        
        
           
        
        
          Thirteen

          
            Weeks Ended
          
          
            May 5,
          
          
            2007
          
        
        
           
        
        
          Thirteen

          
            Weeks Ended
          
          
            April 29,
          
          
            2006
          
        
      
      
        
          (in thousands, except per share data)
        
        
        
        
        
        
          Unaudited
        
        
        
        
          Unaudited
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net sales
        
        
        
        
        
        
          $
        
        
          49,256 
        
        
        
        
          $
        
        
          49,805 
        
      
      
        
          Cost of merchandise sold, occupancy, and buying expenses
        
        
        
        
        
        
           
        
        
          
            33,968 
          
        
        
           
        
        
           
        
        
          
            33,508 
          
        
      
      
        
          Gross profit
        
        
        
        
        
        
        
        
          15,288 
        
        
        
        
        
        
          16,297 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Operating expenses
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Selling
        
        
        
        
        
        
        
        
          11,892 
        
        
        
        
        
        
          10,398 
        
      
      
        
          General and administrative
        
        
        
        
        
        
        
        
          4,565 
        
        
        
        
        
        
          4,699 
        
      
      
        
          Loss on disposal of property and equipment
        
        
        
        
        
        
           
        
        
          36 
        
        
           
        
        
           
        
        
          15 
        
      
      
        
          Operating income (loss)
        
        
        
        
        
        
        
        
          (1,205)
        
        
        
        
        
        
          1,185 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Interest expense
        
        
        
        
        
        
        
        
          (362)
        
        
        
        
        
        
          (113)
        
      
      
        
          Other income, net
        
        
        
        
        
        
           
        
        
          12 
        
        
           
        
        
           
        
        
          23 
        
      
      
        
          Income (loss) before income taxes
        
        
        
        
        
        
        
        
          (1,555)
        
        
        
        
        
        
          1,095 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Income tax expense (benefit)
        
        
        
        
        
        
           
        
        
          (589)
        
        
           
        
        
           
        
        
          427 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net income (loss)
        
        
        
        
        
        
          $
        
        
          (965)
        
        
           
        
        
          $
        
        
          668 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Basic earnings (loss) per share
        
        
        
        
        
        
          $
        
        
          (0.15)
        
        
           
        
        
          $
        
        
          0.11 
        
      
      
        
          Diluted earnings (loss) per share
        
        
        
        
        
        
          $
        
        
          (0.15)
        
        
           
        
        
          $
        
        
          0.10 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Weighted average shares outstanding
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Basic
        
        
        
        
        
        
        
        
          6,493 
        
        
        
        
        
        
          6,332 
        
      
      
        
          Diluted
        
        
        
        
        
        
        
        
          6,493 
        
        
        
        
        
        
          6,811 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Cash Flow Data
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Cash used in operating activities
        
        
        
        
        
        
          $
        
        
          (4,134)
        
        
        
        
          $
        
        
          (7,179)
        
      
      
        
          Cash used in investing activities
        
        
        
        
        
        
        
        
          (2,526)
        
        
        
        
        
        
          (4,836)
        
      
      
        
          Cash provided by financing activities
        
        
        
        
        
        
        
        
          6,412 
        
        
        
        
        
        
          8,286 
        
      
      
        
          Net decrease in cash
        
        
        
        
        
        
        
        
          (248)
        
        
        
        
        
        
          (3,729)
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Supplemental Data
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Comparable store sales decrease
        
        
        
        
        
        
        
        
          (9.3)%
        
        
        
        
        
        
          (0.8)%
        
      
      
        
          Gross profit percentage
        
        
        
        
        
        
        
        
          31.0%
        
        
        
        
        
        
          32.7%
        
      
      
        
          Number of stores at end of period
        
        
        
        
        
        
        
        
          258 
        
        
        
        
        
        
          245 
        
      
    
    
      
        
          Bakers Footwear Group, Inc.

          
            Balance Sheet Data
          
        
        
           
        
        
           
        
        
          May 5, 2007
        
        
           
        
        
          April 29, 2006
        
      
      
        
          (in thousands)
        
        
        
        
        
        
          Unaudited
        
        
        
        
          Unaudited
        
      
      
        
          Cash
        
        
        
        
        
        
          $
        
        
          159 
        
        
        
        
          $
        
        
          196 
        
      
      
        
          Accounts receivable
        
        
        
        
        
        
        
        
          2,596 
        
        
        
        
        
        
          2,583 
        
      
      
        
          Inventories
        
        
        
        
        
        
        
        
          27,797 
        
        
        
        
        
        
          28,199 
        
      
      
        
          Other current assets
        
        
        
        
        
        
           
        
        
          7,465 
        
        
           
        
        
           
        
        
          2,665 
        
      
      
        
          Current assets
        
        
        
        
        
        
        
        
          38,017 
        
        
        
        
        
        
          33,643 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Property and equipment, net
        
        
        
        
        
        
        
        
          51,374 
        
        
        
        
        
        
          41,827 
        
      
      
        
          Other assets
        
        
        
        
        
        
           
        
        
          1,637 
        
        
           
        
        
           
        
        
          846 
        
      
      
        
        
        
        
        
        
        
          $
        
        
          91,028 
        
        
           
        
        
          $
        
        
          76,316 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Accounts payable
        
        
        
        
        
        
          $
        
        
          10,084 
        
        
        
        
          $
        
        
          10,164 
        
      
      
        
          Revolving credit facility
        
        
        
        
        
        
        
        
          19,588 
        
        
        
        
        
        
          6,830 
        
      
      
        
          Other current liabilities
        
        
        
        
        
        
           
        
        
          10,788 
        
        
           
        
        
           
        
        
          9,199 
        
      
      
        
          Current liabilities
        
        
        
        
        
        
        
        
          40,460 
        
        
        
        
        
        
          26,193 
        
      
      
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Noncurrent liabilities
        
        
        
        
        
        
        
        
          10,174 
        
        
        
        
        
        
          7,276 
        
      
      
        
          Shareholders’ equity
        
        
        
        
        
        
           
        
        
          40,394 
        
        
           
        
        
           
        
        
          42,847 
        
      
      
        
        
        
        
        
        
        
          $
        
        
          91,028 
        
        
           
        
        
          $
        
        
          76,316 
        
      
    
    
      
        
          
            Table 1: Reconciliation of the 
            Company’s 
            net loss to EBITDA:
          
        
      
      
        
          Reconciliation of Net Loss to EBITDA
        
        
          Anticipated Year Ended February 2, 2008
        
        
           
        
        
          Actual Year Ended February 3, 2007
        
      
      
        
          (in thousands)
        
        
        
        
        
        
        
      
      
        
          Net Loss
        
        
          $ (1,550) – (3,250)
        
        
        
        
          $ (1,543)
        
      
      
        
          Income tax benefit
        
        
          (950) – (2,050)
        
        
        
        
          (910)
        
      
      
        
          Interest expense
        
        
          1,300 – 1,600 
        
        
        
        
          1,005 
        
      
      
        
          Depreciation and amortization expense
        
        
          9,200 – 9,200 
        
        
           
        
        
          7,580 
        
      
      
        
          EBITDA
        
        
          $ 8,000 – 5,500 
        
        
           
        
        
          $ 6,132 
        
      
    
    
      EBITDA is defined as net income (loss) plus the provision for income 
      taxes, interest expense, and depreciation and amortization as presented 
      in the Company’s Statement of Operations. 
      EBITDA should not be considered as an alternative to operating income or 
      net income (as determined in accordance with generally accepted 
      accounting principles (GAAP) as a measure of our operating performance 
      or to net cash provided by operating, investing and financing activities 
      (as determined in accordance with GAAP)) as a measure of our ability to 
      meet cash needs. The Company believes that EBITDA is a measure commonly 
      reported and widely used by investors and other interested parties as a 
      measure of a company's operating performance because it assists in 
      comparing performance on a consistent basis without regard to capital 
      structure, depreciation and amortization or non-operating factors (such 
      as historical cost). This information has been disclosed here to permit 
      a more complete comparative analysis of our operating performance 
      relative to other companies. EBITDA may not, however, be comparable in 
      all instances to other similar types of measures.