Bakers Footwear Group, Inc. reported that its net loss in the second quarter slid to $1.7 million, or 24 cents a share, from $2.3 million, or 32 cents, a year ago. Sales inched up 0.3% to $43.7 million from $43.6 million a year ago. Comps increased 0.7% versus an increase of 6.4% in the prior-year period.
Gross profit in the second quarter remained even with the prior-year period at $12.9 million, or 29.6% of net sales; Operating loss was $1.2 million, compared to $1.4 million in the second quarter last year; Adjusted EBITDA was $830,000 compared to $849,000 in the second quarter last year.
Peter Edison, chairman and CEO, commented, “Our second quarter results, although below our plan, continue to demonstrate that our strategies are working and leading to improved performance for our company. To this end, the second quarter included positive comparable store sales, positive adjusted EBITDA and a reduction in operating loss, as compared to the second quarter last year. This performance is particularly noteworthy because it represents our fifth consecutive quarter of positive comparable store sales, which began in the second quarter of 2008.”
“As we look ahead, we believe we are well positioned for a successful fall season. Although our comparable store sales for August declined 10.3%, resulting from carrying significantly less promotional inventory compared to the prior year, comparable store sales in our fiscal September through Labor Day increased 5.1% as we moved into our core fall offerings. We are encouraged by the excitement and strong early sell-through in the boot category of our business, which drives our performance in the fall and holiday periods. We remain optimistic that our ability to capitalize on footwear trends along with strict financial discipline will enable us to generate improved operating results and adjusted EBITDA during the remainder of fiscal 2009.”
For the first half of fiscal 2009, the twenty-six weeks ended August 1, 2009:
* Net sales were $88.7 million, compared to $87.1 million for the twenty-six weeks ended August 2, 2008.
* Comparable store sales increased 2.8%, compared to a decrease of 3.1% in the first half of 2008;
* Gross profit was $25.6 million, or 28.9% of net sales, compared to $24.1 million, or 27.7% of net sales in the first half of 2008;
* Operating loss was $3.1 million, compared to $5.4 million in the first half of 2008;
* Adjusted EBITDA was $1.1 million compared to negative adjusted EBITDA of $0.8 million in the first half of 2008 (See table I); and
* Net loss was $4.5 million or $0.62 per share, compared to $7.1 million, or $1.02 per share in the first half of 2008.
Amendments to Debt Agreements
On September 8, 2009, the company amended the terms of its subordinated secured term loan. The amendment was made to change the minimum adjusted EBITDA covenant for the second quarter of fiscal year 2009 in order to maintain compliance at August 1, 2009. As consideration for these changes the company paid a nominal fee.
Also, on September 8, 2009, the company amended its revolving credit agreement with Bank of America. The amendment grants consent to the amendment of the subordinated secured term loan. The amendment also increased the interest rate and unused line fee under the facility and imposed a nominal fee as consideration.
Based on the company's business plan, the company believes it has adequate liquidity to fund anticipated working capital requirements and expects to be in compliance with its financial covenants throughout the remainder of 2009.
