Bakers Footwear reported fourth-quarter sales were $53.6 million, a decrease of 8.0 percent from $58.2
million in the year-ago period. Comparable store sales decreased 7.1 percent following an increase of 2.6 percent in the prior-year period.
For the fourth quarter, the thirteen weeks ended Jan. 28, 2012:
- Gross profit was $16.2 million, or 30.2 percent of net sales, compared to $20.6 million, or 35.3 percent of net sales, in the fourth quarter last year. This decrease reflects increased promotional activity in the company's boot category to allow the company to end the year positioned for the spring season;
- Selling, general and administrative expenses were $15.2 million, or 28.4 percent of net sales, compared to $15.1 million, or 25.9 percent of net sales, in the prior-year period;
- The net gain from the sale of the Wild Pair trademark to Steven Madden, Ltd in December 2011 was $3.8 million.
- Operating income was $3.9 million including the net gain on the sale of the Wild Pair trademark, partially offset by $0.95 million in impairment expense related to non-cash charges associated with certain underperforming stores. This compared to operating income of $5.5 million in the fourth quarter last year; and
- Net income was $3.4 million or $0.36 per diluted share, compared to $5.2 million, or $0.54 per diluted share in the fourth quarter last year.
Peter Edison, chairman and chief executive officer of Bakers Footwear Group commented, “As we anticipated, our fourth quarter performance reflected a difficult dress boot season, which resulted in lower fourth quarter sales and margins. On a positive note, we achieved profitability in the quarter, and advanced our cost reduction goals while positioning our inventory to capitalize on the spring season. In 2011, we made progress toward the priorities we set at the start of the year to position our company for improved sales productivity and achieving long term profitability. We achieved our fourth consecutive year of positive comparable store sales and increased the percentage of exclusive brands in our Bakers stores to provide further differentiation in our offerings. We also generated strong growth in our multi-channel sales which grew by 31.2 percent in fiscal 2011. As we begin fiscal 2012 we are focused on delivering $10 million in margin enhancements and cost cuts while providing our customers with compelling fashion. We are pleased to see a positive response to our spring assortments and remain confident in our strategies and our ability to realize improved operating results in fiscal 2012.”
For the fiscal year, the fifty-two weeks ended January 29, 2011:
- Net sales were $185.1 million, compared to $185.6 million for the fifty-two weeks ended January 29, 2011;
- Comparable store sales increased 1.3 percent, compared to a 1.7 percent increase in fiscal 2010;
- Gross profit was $46.3 million, or 25.0 percent of net sales, compared to $49.6 million, or 26.7 percent of net sales in fiscal 2010;
- Selling, general and administrative expenses were $57.5 million, or 31.0 percent of net sales, compared to $55.6 million, or 30.0 percent of net sales, in fiscal 2010;
- Impairment expense was $1.9 million, reflecting non-cash charges associated with certain underperforming stores, compared to $1.4 million in fiscal 2010;
- Operating loss was $9.2 million and included a $3.8 million net gain on the sale of the Wild Pair trademark and a $1.9 million non-cash impairment charge associated with certain underperforming stores. This compared to an operating loss of $7.5 million, which included a $1.4 million non-cash impairment charge in fiscal 2010; and
- Net loss was $11.0 million or $1.18 per share, compared to a net loss of $9.3 million, or $1.14 per share in fiscal 2009.
For the first quarter of fiscal 2012 ending April 28, 2012, comparable store sales decreased 2.7 percent compared to an increase of 9.3 percent in the same period last year.
On April 26, 2012, the company amended its subordinated convertible debentures to reschedule the principal payments from four annual payments commencing June 30, 2012 to four annual payments commencing February 15, 2013 and increased the interest rate to 13 percent per annum from 12 percent per annum. Based on the company's business plan, including the anticipated impact of the margin improvement and cost reduction program, the company believes it has adequate liquidity to fund anticipated working capital requirements and expects to be in compliance with its financial covenants throughout 2012. The company's most recent Annual Report on Form 10-K, filed April 27, 2012, discusses the company's business plan and discloses in detail the risks of the company's current liquidity situation, including the risks associated with the company's ability to successfully implement the margin improvement and cost reduction program, and its ability to comply with its financial covenants.
Bakers Footwear Group, Inc. Thirteen Thirteen Fifty-two Fifty-two
Income Weeks Ended Weeks Ended Weeks Ended Weeks Ended
Statement Data January 28, January 29, January 28, January 29,
2012 2011 2012 2011
-------------------------------------------------------- ------------ ------------ ------------- -------------
(in thousands, except per share data) Unaudited Unaudited Unaudited Unaudited
Net sales $ 53,577 $ 58,233 $ 185,095 $ 185,626
Cost of merchandise sold, occupancy, and buying expenses 37,395 37,680 138,749 136,054
------ ------ ------- -------
Gross profit 16,182 20,553 46,346 49,572
Operating expenses
Selling 10,932 11,365 41,037 40,365
General and administrative 4,273 3,728 16,474 15,252
(3,839) 3 (3,809) 71
(Gain) Loss on disposal of property and equipment
Impairment of long-lived assets 950 -- 1,883 1,416
------ ------ ------- -------
Operating income (loss) 3,866 5,457 (9,239) (7,532)
Interest expense (499) (537) (1,889) (2,074)
Other income, net 8 10 171 127
------ ------ ------- -------
Income (loss) before income taxes 3,375 4,930 (10,957) (9,479)
Income tax benefit -- (239) -- (187)
------ ------ --- ------- ------- ---
Net income (loss) $ 3,375 $ 5,169 $ (10,957) $ (9,292)
Basic earnings (loss) per common share $ 0.36 $ 0.56 $ (1.18) $ (1.14)
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Diluted earnings (loss) per common share $ 0.36 $ 0.54 $ (1.18) $ (1.14)
=== ====== === ====== === ======= === === ======= ===
Weighted average shares outstanding
Basic 9,296 9,229 9,287 8,174
Diluted 9,839 9,779 9,287 8,174
Cash Flow Data
Cash used in operating activities $ (2,264) $ (502)
Cash provided by (used in) investing activities 1,155 (995)
Cash provided by financing activities 1,111 1,489
Net increase (decrease) in cash 2 (8)
Supplemental Data
Comparable store sales increase (decrease) (7.1 %) 2.6 % 1.3 % 1.7 %
Gross profit percentage 30.2 % 35.3 % 25.0 % 26.7 %
Unused borrowing capacity at end of period $ 3,061 $ 1,556
Number of stores at end of period 227 232 227 232
