For Further Information:
Big Dog Holdings, Inc.
121 Gray Avenue
Santa Barbara, California 93101
www.bigdogs.com
www.thewalkingcompany.com
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CONTACT:
Laura Russell
Investor Information
(805) 963-8727, ext. 1360
laurar@bigdogs.com
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For Immediate Release:
May 5, 2005
Big Dog Holdings, Inc. Announces First Quarter 2005 Financial Results
Santa Barbara, California - May 5, 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 first quarter ended March 31, 2005.
For the quarter ended March 31, 2005, consolidated net sales were $31,345,000,
a 43% increase, as compared with $21,880,000 in the first quarter 2004. Our
consolidated net sales increased primarily due to the addition of $10,608,000
of revenue from The Walking Company ("TWC") business which was acquired on
March 3, 2004. The Company had a total of 254 stores opened (180 Big Dog
stores and 74 TWC stores) at the end of the period, as compared with 263
stores opened on March 31, 2004 (191 Big Dog stores and 72 TWC stores.)
Comparable retail store sales increased 4.4% for the quarter (5.6% decline for
the Big Dogs chain and 14.8% increase for TWC chain.) Total consolidated gross
profit for the quarter increased to 51.8% of net sales or $16,227,000 as
compared with 51.3% of net sales or $11,221,000 in the first quarter 2004.
The overall dollar increase in consolidated gross profit is primarily the
result of contributions from our new TWC chain as well as higher percentage
margin contribution from both the Big Dogs and TWC chains.
Andrew Feshbach, Chief Executive Officer, stated, "Our TWC business
experienced solid operating results in the first quarter, as reflected in
strong positive comparative store sales increase and merchandise margin
growth. The increase in The Walking Company comparable store sales is
primarily related to improved inventory levels and merchandise selection at
the TWC stores since the Company purchased The Walking Company out of
bankruptcy in March 2004. At Big Dogs, we continue to move toward a business
model which emphasizes our graphic strength and less reliance on promotional
pricing. Similar sales trends for both TWC and Big Dogs have continued into
the second quarter."
Consolidated operating expenses in the first quarter 2005 were $20,010,000 or
63.8% of sales compared to $15,928,000 or 72.8% in 2004. The dollar increase
in consolidated operating expenses primarily relates to the TWC acquisition,
while the decrease in such expenses as a percentage of sales is attributable
to leveraging these expenses over a larger revenue base in addition to
efficiencies created as a result of the TWC acquisition. The consolidated net
loss per share for the first quarter 2005 decreased to $.26 per share, as
compared with a consolidated net loss of $.36 per share for the first quarter
2004 primarily due to a lower net loss for the quarter, and additional shares
outstanding as of quarter end.
..
Commenting on the financial results, Andrew Feshbach, Chief Executive Officer,
stated, "We are pleased with the operating efficiencies and leverage we
experienced in the first quarter of this year. At this time, most of the
opportunities for improved efficiencies from the acquisition of TWC have been
achieved."
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(R) brand image is one of
quality, value and fun. The BIG DOGS(R) 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 180 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 74 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,
-------------------------------------------
2005 2004
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ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 427,000 $ 1,251,000
Receivables, net 555,000 413,000
Inventories 51,918,000 41,776,000
Prepaid expenses and other current assets 1,480,000 1,280,000
Deferred income taxes 4,119,000 2,604,000
-------------------- -------------------
Total current assets 58,499,000 47,324,000
PROPERTY AND EQUIPMENT, Net 9,357,000 10,653,000
INTANGIBLE ASSETS, Net 172,000 214,000
DEFERRED INCOME TAXES 366,000 1,053,000
OTHER ASSETS 358,000 433,000
-------------------- -------------------
TOTAL $ 68,752,000 $ 59,677,000
==================== ===================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings $ 8,811,000 $ 8,840,000
Redeemable convertible notes - 4,992,000
Current portion of long-term debt 247,000 164,000
Accounts payable 12,628,000 7,270,000
Income taxes payable - 38,000
Accrued expenses and other current liabilities 4,977,000 5,628,000
-------------------- -------------------
Total current liabilities 26,663,000 26,932,000
NOTE PAYABLE 265,000 487,000
CAPITAL LEASE OBLIGATIONS 209,000 139,000
DEFERRED RENT AND LEASE INCENTIVES 1,240,000 597,000
DEFERRED GAIN ON SALE-LEASEBACK 235,000 288,000
-------------------- -------------------
Total liabilities 28,612,000 8,443,000
STOCKHOLDERS' EQUITY 40,140,000 31,234,000
-------------------- -------------------
TOTAL $ 68,752,000 $ 59,677,000
==================== ===================
BIG DOG HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended
March 31,
------------------------------------------
2005 2004
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NET SALES $ 31,345,000 $ 21,880,000
COST OF GOODS SOLD 15,118,000 10,659,000
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GROSS PROFIT 16,227,000 11,221,000
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OPERATING EXPENSES:
Selling, marketing and distribution 18,267,000 14,131,000
General and administrative 1,743,000 1,797,000
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Total operating expenses 20,010,000 15,928,000
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LOSS FROM OPERATIONS (3,783,000) (4,707,000)
INTEREST INCOME 40,000 7,000
INTEREST EXPENSE (151,000) (132,000)
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LOSS BEFORE BENEFIT FROM
INCOME TAXES (3,894,000) (4,832,000)
BENEFIT FROM INCOME TAXES (1,480,000) (1,836,000)
------------------- ------------------
NET LOSS $ (2,414,000) $ (2,996,000)
=================== ==================
NET LOSS PER SHARE
BASIC $ (0.26) $ (0.36)
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DILUTED $ (0.26) $ (0.36)
=================== ==================
WEIGHTED AVERAGE SHARES OUTSTANDING:
BASIC 9,180,000 8,244,000
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DILUTED 9,180,000 8,244,000
=================== ==================