EX-99.1 2 ex99.txt EXHIBIT 99.1 PRESS RELEASE For Further Information: Big Dog Holdings, Inc. 121 Gray Avenue Santa Barbara, California 93101 www.bigdogs.com www.thewalkingcompany.com ------------------------ CONTACT: Laura Russell Investor Information (805) 963-8727, ext. 1360 laurar@bigdogs.com ------------------ 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 -------------------- ------------------- 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 ------------------- ------------------ NET SALES $ 31,345,000 $ 21,880,000 COST OF GOODS SOLD 15,118,000 10,659,000 ------------------- ------------------ GROSS PROFIT 16,227,000 11,221,000 ------------------- ------------------ OPERATING EXPENSES: Selling, marketing and distribution 18,267,000 14,131,000 General and administrative 1,743,000 1,797,000 ------------------- ------------------ Total operating expenses 20,010,000 15,928,000 ------------------- ------------------ LOSS FROM OPERATIONS (3,783,000) (4,707,000) INTEREST INCOME 40,000 7,000 INTEREST EXPENSE (151,000) (132,000) ------------------- ------------------ 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) =================== ================== DILUTED $ (0.26) $ (0.36) =================== ================== WEIGHTED AVERAGE SHARES OUTSTANDING: BASIC 9,180,000 8,244,000 =================== ================== DILUTED 9,180,000 8,244,000 =================== ==================