Bakers Footwear Group, Inc. reported net income for the quarter plunged to $0.5 million or 7 cents per share from $7.3 million, or $1.03 per share in last year's fourth quarter. Results for the prior year period included a gain of $4.8 million or 67 cents per share from the early termination of an operating lease. Net sales were $55.5 million, up 1.3% from $54.7 million in the corresponding period last year. Comparable store sales for the quarter increased 3.6%.
The footwear retailer said it wasimpacted by highly promotional retail environment during mid-December in response to sluggish holiday sales. The company also announced an amendment to the credit agreement and a senior level promotion and noted that it received an audit report that raised doubt about the going concern status of the company.
Operating income was $1.3 million or 2.3% of net sales, compared to $7.8 million or 14.2% of net sales in the year-ago quarter
For the twelve-month period, net loss narrowed to $15 million or $2.13 per share, from $17.7 million, or $2.70 per share in fiscal 2007. Net sales declined to $183.7 million, from $186.3 million in the previous year. Comparable store sales increased 0.5%, compared to a 12.3% decrease in fiscal 2007.
Bakers said on April 9, the company amended the terms of its subordinated secured term loan to adjust the EBITDA covenant for the fourth quarter of fiscal year 2008 and to tighten financial covenants for fiscal years 2009 and 2010. As consideration for these changes, the company paid a fee and issued additional shares of common stock.
On April 9, 2009, the company amended its revolving credit agreement with Bank of America. The amendment extended the expiration date of the facility from August 2010 to January 2011. The amendment reduced the overall facility from $40 million to $30 million, increased the interest rate and unused line fee, and made certain other changes to the terms of the facility.
Bakers said, despite its strong disagreement, and the positive performance in fiscal 2009-to-date sales, it received an audit report on its fiscal 2008 financial statements from its independent registered public accounting firm which included an explanatory paragraph describing the existence of conditions that raise substantial doubt about whether the company can continue as a going concern. Bakers plans to file the report as part of its Annual Report on Form 10-K with the Securities and Exchange Commission.
