SOURCE: Big Dog Holdings, Inc.

November 02, 2005 08:00 ET

Big Dog Holdings, Inc. Announces Third Quarter 2005 Financial Results

SANTA BARBARA, CA -- (MARKET WIRE) -- November 2, 2005 -- 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 third quarter ended September 30, 2005.

For the quarter ended September 30, 2005, consolidated net sales were $44,909,000 as compared with $42,695,000 in the third quarter 2004. Our consolidated net sales increased 5.2%, primarily due to comparative stores sales increase of 4.1% (comparative store sales decline of 1.6% for Big Dogs and comparative store sales increase of 13.1% for TWC), and the net increase in the number of stores opened for the quarter. The Company had a total of 263 stores opened (176 Big Dog stores and 87 TWC stores) at the end of the period, as compared 261 stores last year (188 Big Dogs stores and 73 TWC stores as of September 30, 2004). Consolidated gross profit increased to $25,286,000 in the third quarter 2005 as compared with $23,433,000 in the third quarter 2004. The overall increase in consolidated gross profit is the result of increased sales for TWC, as well as increased margin contributions from both Big Dogs and TWC. Big Dogs' gross margin for the period increased to 60.4%, as compared to last year's margin of 58.0%, and the gross margin for the TWC chain increased to 50.9% compared to 49.7% last year.

Consolidated operating expenses in the third quarter 2005 were $22,262,000, or 49.6% of consolidated net sales, compared to $21,174,000, or 49.6% in 2004. Consolidated net income increased to $1,770,000 in 2005 as compared to $1,284,000 for the third quarter 2004. Fully diluted net income per share increased to $.18 per share as compared with $.13 per share last year.

Included in the third quarter, effective August 31, 2005, is the purchase by The Walking Company of Footworks, a seven-store comfort shoe chain that primarily operates in the Las Vegas market. The Company purchased its assets for approximately $10.1 million.

Andrew Feshbach, Chief Executive Officer, stated, "Given the unusual number of hurricanes this quarter, we are very pleased with the results of our 3rd quarter business for both chains. Currently, we are focused on our 4th quarter business and integrating our Footworks acquisition into The Walking Company. Sales in the 4th quarter are trending as experienced earlier this year and we look forward to a good holiday selling season."

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 176 retail stores, Big Dogs markets its products through its catalog, internet and corporate sales accounts. The Walking Company is a leading independent specialty retailer of high quality, technically designed comfort shoes 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 88 stores in premium malls across the nation.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 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)

                                                   September 30,
                                          ----------------------------
                                                2005           2004
                                          -------------  -------------

                    ASSETS
CURRENT ASSETS:
 Cash and cash equivalents                $     390,000  $   2,330,000
 Receivables, net                               529,000        403,000
 Inventories                                 58,573,000     51,791,000
 Prepaid expenses and other current
  assets                                      1,478,000      1,214,000
 Deferred income taxes                        1,923,000      1,287,000
                                          -------------  -------------
      Total current assets                   62,893,000     57,025,000
PROPERTY AND EQUIPMENT, Net                  10,756,000     10,520,000
INTANGIBLE ASSETS, Net                        7,811,000        172,000
DEFERRED INCOME TAXES                         1,613,000      1,292,000
OTHER ASSETS                                    360,000        420,000
                                          -------------  -------------
 TOTAL                                    $  83,433,000  $  69,429,000
                                          =============  =============


          LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
 Short-term borrowings                    $  12,191,000  $  15,628,000
 Current portion of long-term debt            1,616,000        272,000
 Accounts payable                            14,577,000      7,720,000
 Income taxes payable                         1,006,000        452,000
 Accrued expenses and other current
  liabilities                                 4,533,000      4,963,000
                                          -------------  -------------
      Total current liabilities              33,923,000     29,035,000
NOTE PAYABLE                                  4,736,000        530,000
CAPITAL LEASE OBLIGATIONS                        83,000        298,000
DEFERRED RENT AND LEASE INCENTIVES            1,376,000        953,000
DEFERRED GAIN ON SALE-LEASEBACK                 208,000        261,000
                                          -------------  -------------
 Total liabilities                           40,326,000     31,077,000
STOCKHOLDERS' EQUITY                         43,107,000     38,352,000
                                          -------------  -------------
 TOTAL                                    $  83,433,000  $  69,429,000
                                          =============  =============



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


                            Three Months Ended        Nine Months Ended
                               September 30,             September 30,
                            2005         2004         2005         2004
                        ------------ ------------ ------------ ------------

NET SALES              $ 44,909,000 $ 42,695,000 $119,695,000 $105,619,000
COST OF GOODS SOLD       19,623,000   19,262,000   53,502,000   47,934,000
                       ------------ ------------ ------------ ------------
GROSS PROFIT             25,286,000   23,433,000   66,193,000   57,685,000
                       ------------ ------------ ------------ ------------
OPERATING EXPENSES:
 Selling, marketing
  and distribution       20,055,000   19,363,000   57,649,000   52,371,000
 General and
  administrative          2,207,000    1,811,000    6,236,000    5,544,000
                       ------------ ------------ ------------ ------------
     Total operating
      expenses           22,262,000   21,174,000   63,885,000   57,915,000
                       ------------ ------------ ------------ ------------
INCOME (LOSS) FROM
 OPERATIONS               3,024,000    2,259,000    2,308,000     (230,000)
OTHER INCOME                      -            -            -       82,000
INTEREST INCOME               1,000        5,000       42,000       25,000
INTEREST EXPENSE           (170,000)    (192,000)    (618,000)    (619,000)
                       ------------ ------------ ------------ ------------
INCOME (LOSS) BEFORE
 PROVISION (BENEFIT)
 FOR INCOME TAXES         2,855,000    2,072,000    1,732,000     (742,000)
PROVISION (BENEFIT) FOR
 INCOME TAXES             1,085,000      788,000      658,000     (281,000)
                       ------------ ------------ ------------ ------------
NET INCOME (LOSS)      $  1,770,000 $  1,284,000 $  1,074,000 $   (461,000)
                       ============ ============ ============ ============

NET INCOME (LOSS) PER
 SHARE
   BASIC               $       0.19 $       0.14 $       0.12 $      (0.05)
                       ============ ============ ============ ============
   DILUTED             $       0.18 $       0.13 $       0.11 $      (0.05)
                       ============ ============ ============ ============

WEIGHTED AVERAGE
 SHARES OUTSTANDING:

   BASIC                  9,141,000    9,189,000    9,169,000    8,568,000
                       ============ ============ ============ ============
   DILUTED                9,680,000    9,633,000    9,736,000    8,568,000
                       ============ ============ ============ ============

Contact Information