##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 þ
    
    Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended July 30, 2005
 o
    
    Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 for the transition period from ______to ______
 Commission
File Number: 000-50563
 BAKERS FOOTWEAR GROUP, INC.
 (Exact name of registrant as specified in its charter)
 Missouri
    
    43-0577980(State of other jurisdiction of
incorporation or organization)
    
    (I.R.S. Employer Identification Number)2815 Scott Avenue,
    
    63103St. Louis, Missouri
    
    (Zip Code)(Address of principal executive offices)
 (314)621-0699  (Registrants telephone number, including area code)
 Not Applicable  (Former name, former address and former fiscal year, if changed since last report)
 þ o
 o þ
 o þ




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BAKERS FOOTWEAR GROUP, INC.
INDEX TO FORM 10-Q
 PagePart I Financial InformationItem 1. Financial Statements (Unaudited)Condensed Balance Sheets
    
    3Condensed Statements of Operations
    
    4Condensed Statement of Shareholders Equity
    
    5Condensed Statements of Cash Flows
    
    6Notes to Condensed Financial Statements
    
    7-12Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    13-21Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    21Item 4. Controls and Procedures
    
    21-22Part II Other InformationItem 2. Changes in Securities and Use of Proceeds
    
    23Item 4. Submission of Matters to a Vote of Security Holders
    
    23Item 6. Exhibits
    
    23Signatures
    
    24Exhibit Index
    
    25Rule 13a-14(a)15d-14(a) Certification Executed by CEORule 13a-14(a)15d-14(a) Certification Executed by CFOSection 1350 Certification Executed by CEOSection 1350 Certification Executed by CFO
  2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 BAKERS FOOTWEAR GROUP, INC.
 
 CONDENSED BALANCE SHEETS
 July 31,
    
    
    January 1,
    
    
    July 30,2004
    
    
    2005
    
    
    2005Unaudited
    
    
    
    
    
    
    UnauditedAssetsCurrent assets:Cash and cash equivalents
    
    $
    6,226,014
    
    
    $
    6,675,135
    
    
    $
    2,397,231Accounts receivable
    
    
    693,164
    
    
    
    1,237,450
    
    
    
    1,095,184Other receivables
    
    
    200,412
    
    
    
    645,855
    
    
    
    948,411Inventories
    
    
    16,436,204
    
    
    
    16,790,753
    
    
    
    21,530,715Prepaid expenses and other current assets
    
    
    899,685
    
    
    
    1,048,347
    
    
    
    1,081,060Prepaid federal income taxes
    
    
    
    
    
    
    
    
    
    
    1,486,303Deferred income taxes
    
    
    1,658,647
    
    
    
    1,904,963
    
    
    
    1,267,363Total current assets
    
    
    26,114,126
    
    
    
    28,302,503
    
    
    
    29,806,267Property and equipment, net
    
    
    15,768,727
    
    
    
    20,714,211
    
    
    
    29,861,793Other assets
    
    
    236,162
    
    
    
    353,994
    
    
    
    527,911Total assets
    
    $
    42,119,015
    
    
    $
    49,370,708
    
    
    $
    60,195,971Liabilities and shareholders equityCurrent liabilities:Accounts payable
    
    $
    5,540,916
    
    
    $
    6,662,044
    
    
    $
    7,913,339Accrued expenses
    
    
    4,323,025
    
    
    
    7,457,043
    
    
    
    7,996,046Sales tax payable
    
    
    534,142
    
    
    
    1,422,716
    
    
    
    706,927Deferred income
    
    
    728,026
    
    
    
    914,814
    
    
    
    1,000,178Current maturities of capital lease obligations
    
    
    796,764
    
    
    
    667,698
    
    
    
    490,962Total current liabilities
    
    
    11,922,873
    
    
    
    17,124,315
    
    
    
    18,107,452Obligations under capital leases, less current maturities
    
    
    902,532
    
    
    
    679,414
    
    
    
    411,570Accrued rent liabilities
    
    
    3,020,091
    
    
    
    3,686,119
    
    
    
    5,190,562Deferred income taxes
    
    
    111,408
    
    
    
    806,323
    
    
    
    423,726Shareholders equity:Preferred stock, $0.0001 par value, 5,000,000 shares
authorized, no shares outstanding
    
    
    
    
    
    
    
    
    
    
    Common Stock, $0.0001 par value; 40,000,000 shares
authorized, 5,102,481 shares outstanding at July 31,
2004 and January 1, 2005; 6,193,273 shares outstanding
at July 30, 2005
    
    
    510
    
    
    
    510
    
    
    
    619Additional paid-in capital
    
    
    25,630,708
    
    
    
    25,623,630
    
    
    
    33,402,687Retained earnings
    
    
    530,893
    
    
    
    1,450,397
    
    
    
    2,659,355Total shareholders equity
    
    
    26,162,111
    
    
    
    27,074,537
    
    
    
    36,062,661Total liabilities and shareholders equity
    
    $
    42,119,015
    
    
    $
    49,370,708
    
    
    $
    60,195,971
  3




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##### Table of Contents



BAKERS FOOTWEAR GROUP, INC.
 
 CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
 Thirteen
    
    
    Thirteen
    
    
    Twenty-six
    
    
    Twenty-sixWeeks
    
    
    Weeks
    
    
    Weeks
    
    
    WeeksEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedJuly 31, 2004
    
    
    July 30, 2005
    
    
    July 31, 2004
    
    
    July 30, 2005Net sales
    
    $
    35,402,780
    
    
    $
    45,255,560
    
    
    $
    74,078,948
    
    
    $
    90,198,740Cost of merchandise sold,
occupancy, and buying expenses
    
    
    24,920,111
    
    
    
    30,272,239
    
    
    
    51,150,987
    
    
    
    59,808,800Gross profit
    
    
    10,482,669
    
    
    
    14,983,321
    
    
    
    22,927,961
    
    
    
    30,389,940Operating expenses:Selling
    
    
    7,389,182
    
    
    
    9,126,781
    
    
    
    15,066,600
    
    
    
    17,753,758General and administrative
    
    
    3,567,602
    
    
    
    3,791,679
    
    
    
    6,815,736
    
    
    
    7,348,910Loss on disposal of property and
equipment
    
    
    248,536
    
    
    
    58,758
    
    
    
    275,154
    
    
    
    198,631Operating income (loss)
    
    
    (722,651
    )
    
    
    2,006,103
    
    
    
    770,471
    
    
    
    5,088,641Other income (expense):Interest expense
    
    
    (133,950
    )
    
    
    (86,501
    )
    
    
    (502,922
    )
    
    
    (212,891
    )Other, net
    
    
    95,834
    
    
    
    65,927
    
    
    
    185,065
    
    
    
    102,394Income (loss) before income taxes
    
    
    (760,767
    )
    
    
    1,985,529
    
    
    
    452,614
    
    
    
    4,978,144Provision for (benefit from)
income taxes
    
    
    (266,618
    )
    
    
    761,910
    
    
    
    201,556
    
    
    
    1,903,387Net income (loss)
    
    $
    (494,149
    )
    
    $
    1,223,619
    
    
    $
    251,058
    
    
    $
    3,074,757Basic earnings (loss) per share
    
    $
    (0.10
    )
    
    $
    0.20
    
    
    $
    0.05
    
    
    $
    0.54Diluted earnings (loss) per share
    
    $
    (0.10
    )
    
    $
    0.19
    
    
    $
    0.05
    
    
    $
    0.51
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BAKERS FOOTWEAR GROUP, INC.
 
 CONDENSED STATEMENT OF SHAREHOLDERS EQUITY
(Unaudited)
 Common StockShares
    
    
    
    
    
    
    Additional
    
    
    RetainedIssued and
    
    
    
    
    
    
    Paid-In
    
    
    EarningsOutstanding
    
    
    Amount
    
    
    Capital
    
    
    (Deficit)
    
    
    TotalBalance at January 1, 2005
    
    
    5,102,481
    
    
    $
    510
    
    
    $
    25,623,630
    
    
    $
    1,450,397
    
    
    $
    27,074,537Net loss for transition period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,865,799
    )
    
    
    (1,865,799
    )Balance at January, 29, 2005
    
    
    5,102,481
    
    
    $
    510
    
    
    $
    25,623,630
    
    
    $
    (415,402
    )
    
    $
    25,208,738Shares issued in connection
with private placement of
common stock and warrants
    
    
    1,000,000
    
    
    
    100
    
    
    
    7,540,125
    
    
    
    
    
    
    
    7,540,225Shares issued in connection
with exercise of stock options
    
    
    90,792
    
    
    
    9
    
    
    
    16,379
    
    
    
    
    
    
    
    16,388Income tax benefit from
exercise of stock options
    
    
    
    
    
    
    
    
    
    
    222,553
    
    
    
    
    
    
    
    222,553Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,074,757
    
    
    
    3,074,757Balance at July 30, 2005
    
    
    6,193,273
    
    
    $
    619
    
    
    $
    33,402,687
    
    
    $
    2,659,355
    
    
    $
    36,062,661
  5




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BAKERS FOOTWEAR GROUP, INC.
 
 CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
 Twenty-six
    
    
    Twenty-sixWeeks Ended
    
    
    Weeks EndedJuly 31, 2004
    
    
    July 30, 2005Operating activitiesNet income
    
    $
    251,058
    
    
    $
    3,074,757Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation and amortization
    
    
    1,574,986
    
    
    
    2,331,925Deferred income taxes
    
    
    38,131
    
    
    
    1,226,916Income tax benefit from exercise of stock options
    
    
    
    
    
    
    222,553Beneficial conversion of subordinated debentures
    
    
    163,333
    
    
    
    Loss on disposal of property and equipment
    
    
    275,154
    
    
    
    198,631Changes in operating assets and liabilities:Accounts receivable
    
    
    (44,903
    )
    
    
    (700,986
    )Inventories
    
    
    (3,266,124
    )
    
    
    (3,728,360
    )Prepaid expenses and other current assets
    
    
    (35,815
    )
    
    
    99,696Prepaid federal income taxes
    
    
    
    
    
    
    (1,486,303
    )Other assets
    
    
    788,367
    
    
    
    (150,444
    )Accounts payable
    
    
    2,349,042
    
    
    
    (590,321
    )Accrued expenses and deferred income
    
    
    (666,683
    )
    
    
    2,470,638Accrued rent liabilities
    
    
    388,812
    
    
    
    1,489,114Net cash provided by operating activities
    
    
    1,815,358
    
    
    
    4,457,816Investing activitiesPurchase of property and equipment
    
    
    (4,339,680
    )
    
    
    (10,674,117
    )Proceeds from sale of property and equipment
    
    
    43,386
    
    
    
    9,677Net cash used in investing activities
    
    
    (4,296,294
    )
    
    
    (10,664,440
    )Financing activitiesNet repayments under revolving notes payable
    
    
    (4,934,942
    )
    
    
    Proceeds from sales of common stock and warrants
    
    
    15,543,706
    
    
    
    7,540,225Proceeds from exercise of stock options
    
    
    
    
    
    
    16,388Principal payments under capital lease obligations
    
    
    (488,317
    )
    
    
    (384,517
    )Principal payments of subordinated debt
    
    
    (859,910
    )
    
    
    Payment to retire stock warrants
    
    
    (850,000
    )
    
    
    Cash distributions to shareholders
    
    
    (13,386
    )
    
    
    Net cash provided by financing activities
    
    
    8,397,151
    
    
    
    7,172,096Net increase in cash and cash equivalents
    
    
    5,916,215
    
    
    
    965,472Cash and cash equivalents at beginning of period
    
    
    309,799
    
    
    
    1,431,759Cash and cash equivalents at end of period
    
    $
    6,226,014
    
    
    $
    2,397,231Supplemental disclosures of cash flow informationCash paid for income taxes
    
    $
    127,705
    
    
    $
    1,784,501Cash paid for interest
    
    $
    405,766
    
    
    $
    207,283
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BAKERS FOOTWEAR GROUP, INC.
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS
Unaudited
 1. Basis of Presentation
  2. Change in Fiscal Year
  3. Private Placement of Common Stock and Warrants
    7




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4. Initial Public Offering
      5. Income Taxes
  Thirteen
    
    
    Thirteen
    
    
    Twenty-six
    
    
    Twenty-sixWeeks Ended
    
    
    Weeks Ended
    
    
    Weeks Ended
    
    
    Weeks EndedJuly 31, 2004
    
    
    July 30, 2005
    
    
    July 31, 2004
    
    
    July 30, 2005Current:Federal
    
    $
    (24,146
    )
    
    $
    409,872
    
    
    $
    124,988
    
    
    $
    569,661State and local
    
    
    10,473
    
    
    
    76,850
    
    
    
    38,435
    
    
    
    106,810Total current
    
    
    (13,673
    )
    
    
    486,722
    
    
    
    163,423
    
    
    
    676,471Deferred:Federal
    
    
    (213,006
    )
    
    
    231,738
    
    
    
    32,112
    
    
    
    1,033,192State and local
    
    
    (39,939
    )
    
    
    43,450
    
    
    
    6,021
    
    
    
    193,724Total deferred
    
    
    (252,945
    )
    
    
    275,188
    
    
    
    38,133
    
    
    
    1,226,916Total income tax expense (benefit)
    
    $
    (266,618
    )
    
    $
    761,910
    
    
    $
    201,556
    
    
    $
    1,903,387
  Thirteen
    
    
    Thirteen
    
    
    Twenty-six
    
    
    Twenty-sixWeeks Ended
    
    
    Weeks Ended
    
    
    Weeks Ended
    
    
    Weeks EndedJuly 31, 2004
    
    
    July 30, 2005
    
    
    July 31, 2004
    
    
    July 30, 2005Federal income tax at 34% statutory rate
    
    $
    (258,661
    )
    
    $
    675,080
    
    
    $
    153,889
    
    
    $
    1,692,577State and local taxes, net of federal income
taxes
    
    
    (15,431
    )
    
    
    79,421
    
    
    
    34,401
    
    
    
    199,126Permanent differences
    
    
    7,474
    
    
    
    7,409
    
    
    
    13,266
    
    
    
    11,684Total income tax expense (benefit)
    
    $
    (266,618
    )
    
    $
    761,910
    
    
    $
    201,556
    
    
    $
    1,903,387
 8




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9




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##### Table of Contents



July 31, 2004
    
    
    January 1, 2005
    
    
    July 30, 2005Deferred tax assets:Net operating loss carryforward
    
    $
    424,429
    
    
    $
    732,028
    
    
    $
    Vacation accrual
    
    
    297,268
    
    
    
    353,950
    
    
    
    396,130Inventory
    
    
    936,950
    
    
    
    818,985
    
    
    
    1,068,261Stock-based compensation
    
    
    426,634
    
    
    
    426,634
    
    
    
    284,407Accrued rent
    
    
    1,147,635
    
    
    
    1,413,911
    
    
    
    1,833,309Total deferred tax assets
    
    
    3,232,916
    
    
    
    3,745,508
    
    
    
    3,582,107Deferred tax liabilities:Prepaid expenses
    
    
    
    
    
    
    
    
    
    
    197,027Property and equipment
    
    
    1,685,677
    
    
    
    2,646,868
    
    
    
    2,541,443Total deferred tax liabilities
    
    
    1,685,677
    
    
    
    2,646,868
    
    
    
    2,738,470Net deferred tax assets
    
    $
    1,547,239
    
    
    $
    1,098,640
    
    
    $
    843,637
 6. Stock-Based Compensation
 Accounting for Stock-Based Compensation Accounting for Stock Issued to Employees
   Thirteen
    
    
    Thirteen
    
    
    Twenty-six
    
    
    Twenty-sixWeeks
    
    
    Weeks
    
    
    Weeks
    
    
    WeeksEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedJuly 31, 2004
    
    
    July 30, 2005
    
    
    July 31, 2004
    
    
    July 30, 2005Net income (loss) as reported
    
    $
    (494,149
    )
    
    $
    1,223,619
    
    
    $
    251,058
    
    
    $
    3,074,757Add: Stock based compensation
expense included in net income as
reported
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Deduct: Stock based compensation
expense determined under fair
value method, net of related
income tax effect
    
    
    (99,826
    )
    
    
    (151,576
    )
    
    
    (199,652
    )
    
    
    (255,119
    )Pro forma net income (loss)
    
    $
    (593,975
    )
    
    $
    1,072,043
    
    
    $
    51,406
    
    
    $
    2,819,638Basic earnings (loss) per share:As reported
    
    $
    (0.10
    )
    
    $
    0.20
    
    
    $
    0.05
    
    
    $
    0.54Pro forma
    
    $
    (0.12
    )
    
    $
    0.17
    
    
    $
    0.01
    
    
    $
    0.49Diluted earnings (loss) per share:As reported
    
    $
    (0.10
    )
    
    $
    0.19
    
    
    $
    0.05
    
    
    $
    0.51Pro forma
    
    $
    (0.12
    )
    
    $
    0.17
    
    
    $
    0.01
    
    
    $
    0.47
 10




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##### Table of Contents



Share-Based
Payment Accounting for Stock-Based Compensation
 7. Earnings (Loss) Per Share
   Thirteen
    
    
    Thirteen
    
    
    Twenty-six
    
    
    Twenty-sixWeeks
    
    
    Weeks
    
    
    Weeks
    
    
    WeeksEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedJuly 31, 2004
    
    
    July 30, 2005
    
    
    July 31, 2004
    
    
    July 30, 2005Numerator:Numerator for basic earnings per share
 Net income (loss)
    
    $
    (494,149
    )
    
    $
    1,223,619
    
    
    $
    251,058
    
    
    $
    3,074,757Interest expense related to
convertible debentures
    
    
    
    
    
    
    
    
    
    
    5,754
    
    
    
    Numerator for diluted earnings per share
    
    $
    (494,149
    )
    
    $
    1,223,619
    
    
    $
    256,812
    
    
    $
    3,074,757Denominator for basic earnings per
share  weighted average shares
    
    
    5,102,481
    
    
    
    6,145,613
    
    
    
    4,844,999
    
    
    
    5,744,926Effect of dilutive securitiesStock options
    
    
    
    
    
    
    224,257
    
    
    
    253,087
    
    
    
    238,994Stock purchase warrants
    
    
    
    
    
    
    14,459
    
    
    
    12,677
    
    
    
    5,622Redeemable securities
    
    
    
    
    
    
    
    
    
    
    65,511
    
    
    
    Denominator for diluted earnings per
share  adjusted weighted average
shares and assumed conversions
    
    
    5,102,481
    
    
    
    6,384,329
    
    
    
    5,176,274
    
    
    
    5,989,542
  11




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8.
Subsequent Event  Hurricane Katrina
    12




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 The following discussion should be read in conjunction with the Companys unaudited condensed
financial statements and notes thereto provided herein and the Companys audited financial
statements and notes thereto in our annual report on Form 10-K. The following Managements
Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking
statements that involve risks and uncertainties. Our actual results may differ materially from the
results discussed in the forward-looking statements. The factors that might cause such a difference
also include, but are not limited to, those discussed in our annual report on Form 10-K under Item
1. Business  Cautionary Statements Regarding Forward-Looking Statements and Certain Risks.
 Overview
       Hurricane Katrina
  13




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Critical Accounting Policies
   Merchandise inventories
  Store closing and impairment charges
 Accounting for the Disposal of Long-Lived Assets
 Deferred income taxes
 Accounting for Income Taxes
 14




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##### Table of Contents



Stock Purchase Warrants
 Accounting for Derivative Instruments and Hedging Activities Accounting for Derivative Financial Instruments Indexed
to, and Potentially Settled in, a Companys Own Stock, The Effect of a
Liquidated Damages Clause on a Freestanding Financial Instrument Subject to EITF Issue No. 00-19,
Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a
Companys Own Stock,
 Results of Operations
  Thirteen
    
    
    Thirteen
    
    
    Twenty-
    
    
    Twenty-Weeks
    
    
    Weeks
    
    
    six Weeks
    
    
    six WeeksEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedJuly 31,
    
    
    July 30,
    
    
    July 31,
    
    
    July 30,2004
    
    
    2005
    
    
    2004
    
    
    2005Net sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of merchandise sold, occupancy and buying expense
    
    
    70.4
    
    
    
    66.9
    
    
    
    69.1
    
    
    
    66.3Gross profit
    
    
    29.6
    
    
    
    33.1
    
    
    
    30.9
    
    
    
    33.7Selling expense
    
    
    20.9
    
    
    
    20.2
    
    
    
    20.3
    
    
    
    19.7General and administrative expense
    
    
    10.1
    
    
    
    8.4
    
    
    
    9.2
    
    
    
    8.2Loss on disposal of property and equipment
    
    
    0.7
    
    
    
    0.1
    
    
    
    0.4
    
    
    
    0.2Operating income (loss)
    
    
    (2.1
    )
    
    
    4.4
    
    
    
    1.0
    
    
    
    5.6Other income (expense)
    
    
    0.3
    
    
    
    0.1
    
    
    
    0.2
    
    
    
    0.1Interest expense
    
    
    (0.4
    )
    
    
    (0.1
    )
    
    
    (0.6
    )
    
    
    (0.2
    )Income (loss) before income taxes
    
    
    (2.2
    )
    
    
    4.4
    
    
    
    0.6
    
    
    
    5.5Income tax expense (benefit)
    
    
    (0.8
    )
    
    
    1.7
    
    
    
    0.3
    
    
    
    2.1Net income (loss)
    
    
    (1.4
    )%
    
    
    2.7
    %
    
    
    0.3
    %
    
    
    3.4
    %
  15




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Thirteen
    
    
    Thirteen
    
    
    Twenty-
    
    
    Twenty-Weeks
    
    
    Weeks
    
    
    six Weeks
    
    
    six WeeksEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedJuly 31,
    
    
    July 30,
    
    
    July 31,
    
    
    July 30,2004
    
    
    2005
    
    
    2004
    
    
    2005Number of stores at beginning of period
    
    
    206
    
    
    
    221
    
    
    
    208
    
    
    
    218Stores opened during period
    
    
    1
    
    
    
    6
    
    
    
    1
    
    
    
    13Stores closed during period
    
    
    
    
    
    
    (2
    )
    
    
    (2
    )
    
    
    (6
    )Number of stores at end of period
    
    
    207
    
    
    
    225
    
    
    
    207
    
    
    
    225
 Thirteen Weeks Ended July 30, 2005 Compared to Thirteen Weeks Ended July 31, 2004
 Net sales.
 Gross profit.
 Selling expense.
 General and administrative expense.
 Income tax expense.
 Net income
 Twenty-six Weeks Ended July 30, 2005 Compared to Twenty-six Weeks Ended July 31, 2004
 Net sales.
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##### Table of Contents



Gross profit.
 Selling expense.
 General and administrative expense.
 Interest expense.
 Income tax expense.
 Net income
 Seasonality and Quarterly Fluctuations
    Liquidity and Capital Resources
  17




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##### Table of Contents



July 31, 2004
    
    
    January 1, 2005
    
    
    July 30, 2005Cash
    
    $
    6,226,014
    
    
    $
    6,675,135
    
    
    $
    2,397,231Inventories
    
    
    16,436,204
    
    
    
    16,790,753
    
    
    
    21,530,715Total current assets
    
    
    26,114,126
    
    
    
    28,302,503
    
    
    
    29,806,267Total current liabilities
    
    
    11,922,873
    
    
    
    17,124,315
    
    
    
    18,107,452Net working capital
    
    
    14,191,253
    
    
    
    11,178,188
    
    
    
    11,698,815Property and equipment,
net
    
    
    15,768,727
    
    
    
    20,714,211
    
    
    
    29,861,793Total assets
    
    
    42,119,016
    
    
    
    49,370,708
    
    
    
    60,195,971Total shareholders equity
    
    
    26,162,111
    
    
    
    27,074,537
    
    
    
    36,062,661Unused borrowing capacity*
    
    
    11,608,000
    
    
    
    12,354,131
    
    
    
    16,790,280
 
 *
    
    as calculated under the terms of our revolving credit facility  Operating activities
    Investing activities
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##### Table of Contents



Financing activities
     19




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##### Table of Contents



Off-Balance Sheet Arrangements
  20




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##### Table of Contents



Contractual Obligations
  Payments due in PeriodLess thanContractual Obligations
    
    Total
    
    
    1 Year
    
    
    1 - 3 Years
    
    
    3 -5 Years
    
    
    More than 5 YearsCapital lease obligations (1)
    
    $
    1,257,434
    
    
    $
    702,567
    
    
    $
    523,607
    
    
    $
    31,260
    
    
    $
    Operating lease obligations (2)
    
    
    153,429,055
    
    
    
    20,148,397
    
    
    
    38,321,636
    
    
    
    34,126,536
    
    
    
    60,832,485Purchase obligations (3)
    
    
    25,067,426
    
    
    
    25,059,063
    
    
    
    8,364
    
    
    
    
    
    
    
    Total
    
    $
    179,753,915
    
    
    $
    45,910,027
    
    
    $
    38,853,607
    
    
    $
    34,157,796
    
    
    $
    60,832,485
 
 (1)
    
    Includes payment obligations relating to our point of sale hardware and software leases.(2)
    
    Includes minimum payment obligations related to our store leases.(3)
    
    Includes merchandise on order and payment obligations relating to store construction and
miscellaneous service contracts. Recent Accounting Pronouncements
 Share-Based Payment Accounting for Stock-Based Compensation
 Effect of Inflation
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4. CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
  21




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Internal Control Over Financial Reporting
  22




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##### Table of Contents



BAKERS FOOTWEAR GROUP, INC.
 
 PART II  OTHER INFORMATION
 
 ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
 Purchase of Equity Securities by the Issuer and Affiliated Purchasers
  Issuer Purchases of Equity Securities
 (c) Total Number of(a) Total
    
    
    (b)
    
    
    Shares Purchased as
    
    
    (d) Maximum Number ofNumber of
    
    
    Average
    
    
    Part of Publicly
    
    
    Shares that May Yet BeShares
    
    
    Price Paid
    
    
    Announced Plans or
    
    
    Purchased Under thePeriod
    
    Purchased
    
    
    per Share
    
    
    Programs
    
    
    Plans or ProgramsMay 1, 2005 - May 28, 2005
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    May 29, 2005  July 2, 2005
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    July 3, 2005 - July 30, 2005
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
 ITEM 6. EXHIBITS
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##### Table of Contents



BAKERS FOOTWEAR GROUP, INC.
 
 SIGNATURES
   BAKERS FOOTWEAR GROUP, INC.(Registrant)By:
    
    /s/ Peter A. EdisonPeter A. EdisonChairman of the Board of Directors andChief Executive Officer(On behalf of the Registrant)By:
    
    /s/ Lawrence L. Spanley, Jr.Lawrence L. Spanley, Jr.Chief Financial Officer, Executive Vice President,
Treasurer, and Secretary(As principal financial officer)
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##### Table of Contents



EXHIBIT INDEX
 Number
    
    Description3.1
    
    Restated Articles of Incorporation of the Company (incorporated by reference
to Exhibit 3.1 to the Companys Annual Report on Form 10-K for the fiscal
year ended January 3, 2004 filed on April 2, 2004 (File No. 000-50563)).3.2
    
    Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to
the Companys Annual Report on Form 10-K for the fiscal year ended January
3, 2004 filed on April 2, 2004 (File No. 000-50563)).10.1
    
    Bakers Footwear Group, Inc. 2005 Incentive Compensation Plan (incorporated
by reference to the Companys 2005 Proxy Statement dated April 27, 2005,
Appendix A).11.1
    
    Statement regarding computation of per share earnings (incorporated by
reference from Note 7 of the Companys unaudited interim financial
statements included herein).31.1
    
    Rule 13a-14(a)/15d-14(a) Certification (pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002, executed by Chief Executive Officer).31.2
    
    Rule 13a-14(a)/15d-14(a) Certification (pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002, executed by Chief Financial Officer).32.1
    
    Section 1350 Certification (pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, executed by Chief Executive Officer).32.2
    
    Section 1350 Certification (pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, executed by Chief Financial Officer)
 25