SOURCE: Big Dog Holdings, Inc.

May 07, 2007 05:00 ET

Big Dog Holdings, Inc. Announces First Quarter 2007 Financial Results

SANTA BARBARA, CA -- (MARKET WIRE) -- May 7, 2007 --Big Dog Holdings, Inc. (NASDAQ: BDOG) (www.bigdogs.com) (www.thewalkingcompany.com), a developer and retailer of branded, lifestyle consumer products, today reported the financial results for the first quarter ended March 31, 2007.

For the quarter ended March 31, 2007, consolidated net sales were $44,224,000, a 14% increase, as compared with $38,671,000 in the first quarter 2006. Our consolidated net sales increased primarily due to the addition of 13 net new The Walking Company ("TWC") stores. The Company had a total of 295 stores opened (145 Big Dogs stores and 150 TWC stores) at the end of the period, as compared with 304 stores opened on March 31, 2006 (167 Big Dogs stores and 137 TWC stores.) Comparable retail store sales increased 7.0% for the quarter (12.6% increase for TWC chain and 5.0% decline for the Big Dogs chain.) Total consolidated gross profit for the quarter increased to 52.7% of net sales or $23,300,000 as compared with 52.0% of net sales or $20,097,000 in the first quarter 2006. Gross margin for TWC and Big Dogs increased to 52% and 54.5% compared to 51.6% and 52.7%, respectively, for the same period last year.

Consolidated operating expenses in the first quarter 2007 were $29,210,000 or 66.0% of sales compared to $24,886,000 or 64.4% in 2006. The percentage increase in consolidated operating expenses primarily relates to the Big Dogs' smaller revenue base, additional expenses relating to the relocation of the Company's distribution center and an increase in depreciation and amortization expenses. Consolidated operating loss for the first quarter 2007 was $5,910,000 compared to $4,789,000 for the first quarter 2006. The consolidated net loss per share for the first quarter 2007 increased to $.44 per share, as compared with a consolidated net loss of $.35 per share for the first quarter 2006.

Andrew Feshbach, Chief Executive Officer, stated, "We had a $1.1 million increase in our operating loss this quarter versus last year, which is primarily the result of an increase in depreciation, one-time expenses incurred due to our distribution center move, and the decline in our Big Dogs business. Our outlook for the 2nd quarter is optimistic as our TWC business continues to perform strongly. We also believe our Big Dog business is stabilizing and the start up of our distribution center is complete which will all contribute to a successful 2nd quarter."

Today's Conference Call

Today the Company will host a conference call at 1:30PM PDT to discuss financial results for the Quarter Ended March 31, 2007. Dial in information is as follows: U.S. Toll Free: 1-800-434-1335. Participant code (to be given to the operator): 468143#. In the event you are unable to attend, a recordable copy will be available two (2) hours after the call has ended. Dial in information to listen to the recorded call is as follows: 1-800-750-4065, Participant code: 53456589#.

Big Dog Holdings, Inc. consists of Big Dogs and The Walking Company. Big Dogs develops, markets and retails a branded, lifestyle collection of unique, high-quality, popular-priced consumer products, including activewear, casual sportswear, accessories and gifts. The BIG DOGS® brand image is one of quality, value and fun. The BIG DOGS® brand is designed to appeal to people of all ages and demographics, particularly baby boomers and their kids, big and tall customers, and pet owners. In addition to its 144 retail stores, Big Dogs markets its products through its catalogs, corporate sales accounts and Internet sales. The Walking Company is a leading independent specialty retailer of high quality, technically designed comfort walk wear and accessories that features premium brands such as ECCO, Mephisto, Dansko, Birkenstock and Merrell among many others. These products have particular appeal to one of the largest and most rapidly growing demographics in the nation. The Walking Company operates 152 stores in premium malls across the nation.

Safe Harbor Statement Under the Private Securities Litigation Act 1995- With the exception of historical information, the matters discussed in this press release are forward-looking statements that involve a number of risks and uncertainties. The actual future sales and other results of the Company could differ significantly from those statements. Further information on the Company's risk factors is contained in the Company's quarterly and annual reports as filed with the Securities and Exchange Commission.

                 BIG DOG HOLDINGS, INC. AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEETS
                                (Unaudited)


                                                        March 31,
                                                ---------------------------
                                                    2007          2006
                                                ------------- -------------
                       ASSETS
CURRENT ASSETS:
 Cash and cash equivalents                      $     789,000 $     740,000
 Receivables, net                                   2,187,000     1,061,000
 Inventories                                       74,018,000    57,249,000
 Prepaid expenses and other current assets          1,817,000     2,153,000
 Deferred income taxes                              6,363,000     3,503,000
                                                ------------- -------------
   Total current assets                            85,174,000    64,706,000
PROPERTY AND EQUIPMENT, Net                        25,927,000    15,118,000
INTANGIBLE ASSETS, Net                              4,016,000     4,387,000
GOODWILL                                            3,131,000     3,131,000
DEFERRED INCOME TAXES                               1,740,000     1,835,000
OTHER ASSETS                                          462,000       358,000
                                                ------------- -------------
 TOTAL                                          $ 120,450,000 $  89,535,000
                                                ============= =============

          LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
 Short-term borrowings                          $  38,774,000 $  17,417,000
 Current portion of long-term debt                  2,353,000     1,882,000
 Accounts payable                                  18,004,000    15,222,000
 Income taxes payable                                       -             -
 Accrued expenses and other current liabilities     5,758,000     4,926,000
                                                ------------- -------------
   Total current liabilities                       64,889,000    39,447,000
NOTES PAYABLE                                       2,621,000     4,360,000
CAPITAL LEASE OBLIGATIONS                           2,243,000        12,000
DEFERRED RENT AND LEASE INCENTIVES                  4,850,000     1,533,000
DEFERRED GAIN ON SALE-LEASEBACK                       129,000       182,000
                                                ------------- -------------
 Total liabilities                                 74,732,000    45,534,000
STOCKHOLDERS' EQUITY                               45,718,000    44,001,000
                                                ------------- -------------
 TOTAL                                          $ 120,450,000 $  89,535,000
                                                ============= =============



                  BIG DOG HOLDINGS, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF OPERATIONS
                                (Unaudited)


                                                    Three Months Ended
                                                        March 31,
                                                --------------------------
                                                    2007          2006
                                                ------------  ------------

NET SALES                                       $ 44,224,000  $ 38,671,000
COST OF GOODS SOLD                                20,924,000    18,574,000
                                                ------------  ------------
GROSS PROFIT                                      23,300,000    20,097,000
                                                ------------  ------------
OPERATING EXPENSES:
 Selling, marketing and distribution              25,340,000    21,540,000
 General and administrative                        2,055,000     2,020,000
 Depreciation and amortization                     1,815,000     1,326,000
                                                ------------  ------------
   Total operating expenses                       29,210,000    24,886,000
                                                ------------  ------------
LOSS FROM OPERATIONS                              (5,910,000)   (4,789,000)
INTEREST INCOME                                        3,000         2,000
INTEREST EXPENSE                                    (706,000)     (269,000)
                                                ------------  ------------
LOSS BEFORE BENEFIT FROM INCOME TAXES             (6,613,000)   (5,056,000)
BENEFIT FROM INCOME TAXES                         (2,478,000)   (1,896,000)
                                                ------------  ------------
NET LOSS                                        $ (4,135,000) $ (3,160,000)
                                                ============  ============
NET LOSS PER SHARE
 BASIC                                          $      (0.44) $      (0.35)
                                                ============  ============
 DILUTED                                        $      (0.44) $      (0.35)
                                                ============  ============

WEIGHTED AVERAGE SHARES OUTSTANDING:

 BASIC                                             9,336,000     9,092,000
                                                ============  ============
 DILUTED                                           9,336,000     9,092,000
                                                ============  ============

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