8-K

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549 

FORM 8-K 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 4, 2006

BIG DOG HOLDINGS, INC. 

(Exact name of registrant as specified in its charter)

Delaware	0-22963	52-1868665
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

121 Gray Avenue, Santa Barbara, CA	93101
(Address of Principal Executive Offices)	(Zip Code)

(805) 963-8727

(Registrant’s telephone number, including area code)

(Former name or former address, if changed, since last report)

TABLE OF CONTENTS

Item 1.01. Entry into a Material Definitive Agreement

Item 2.02. Results of Operations and Financial Condition

Item 7.01. Regulation FD Disclosure

SIGNATURES

EXHIBIT INDEX

EXHIBIT 99.1

Item 1.01. Entry into a Material Definitive Agreement

On May 2, 2006, Big Dog Holdings, Inc. issued a press release announcing it had entered into an agreement with TKC XCIX, LLC to lease a 229,500 square feet facility in Charlotte, North Carolina. The facility will be built to suit and will house the Company’s distribution center which is currently located in Santa Fe Springs, CA. The lease is for an initial term of 10 years, with two options to extend the lease for an additional 10 years each. The lease calls for annual base rent of $751,500 for the first five years and $838,472 for year 6 through year 10. The Company also retains the option to purchase the facility. A copy of the press release is attached as Exhibit 99.1.

Item 2.02. Results of Operations and Financial Condition

The information in this Current Report is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.

On May 2, 2006, Big Dog Holdings, Inc. issued a press release announcing its financial results for the three months ended March 31, 2006. A copy of the press release is attached as Exhibit 99.1.

Item 7.01. Regulation FD Disclosure

(c) Exhibits

Exhibit 99.1 — Press Release of Big Dog Holdings, Inc., dated May 2, 2006.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	BIG DOG HOLDINGS, INC.
Dated: May 4, 2006	By:	/s/ Roberta Morris
		Roberta Morris
		Chief Financial Officer

EXHIBIT INDEX

Exhibit
Number	Description
99.1	Press Release of Big Dog Holdings, Inc., dated May 2, 2006

EX-99.1

For Further Information:

Big Dog Holdings, Inc.

121 Gray Avenue

Santa Barbara, California 93101

www.bigdogs.com

www.thewalkingcompany.com

CONTACT:

Investor Information

(805) 963-8727, ext. 1360

alexisd@bigdogs.com

For Immediate Release:

May 2, 2006

Big Dog Holdings, Inc. Announces First Quarter 2006 Financial Results

Santa Barbara, California - May 2, 2006... 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, 2006.

For the quarter ended March 31, 2006, consolidated net sales were $38,671,000, a 23% increase, as compared with $31,345,000 in the first quarter 2005. Our consolidated net sales increased primarily due to the addition of 63 new Walking Company stores which includes 45 Steve Shoes stores, an acquisition that closed in January this quarter. The Company had a total of 304 stores opened (167 Big Dog stores and 137 TWC stores) at the end of the period, as compared with 254 stores opened on March 31, 2005 (180 Big Dog stores and 74 TWC stores.) Comparable retail store sales increased .8% for the quarter (7.8% increase for TWC chain and 7.4% decline for the Big Dog chain.) Total consolidated gross profit for the quarter increased to 52.0% of net sales or $20,097,000 as compared with 51.8% of net sales or $16,227,000 in the first quarter 2005. The overall dollar increase and percentage increase in consolidated gross profit is the result of contributions from TWC chain.

Consolidated operating expenses in the first quarter 2006 were $24,886,000 or 64.4% of sales compared to $20,010,000 or 63.8% in 2005. The percentage increase in consolidated operating expenses primarily relates to the Big Dog’s smaller revenue base, increase in depreciation and amortization and the Steve’s Shoes acquisition. Consolidated operating loss for the first quarter 2006 was $4,789,000 compared to $3,783,000 for the first quarter 2005. The consolidated net loss per share for the first quarter 2006 increased to $.35 per share, as compared with a consolidated net loss of $.26 per share for the first quarter 2005.

Andrew Feshbach, Chief Executive Officer, stated, “We had a $1,000,000 increase in our operating loss, or $600,000 EBITDA decrease, this quarter versus last year which is primarily the result of an increase in depreciation, the decline in our Big Dog’s business, and initial losses relating to our Steve Shoes acquisition.” It should be noted that our first quarter results do not include sales generated by the Easter Holiday since the holiday fell in April and in our second quarter. Our second quarter business continues to reflect a similar trend as experienced in the first quarter.”

New Distribution Center

The Company recently signed a 10 year lease on a build to suit 229,500 square foot distribution center just outside of Charlotte, North Carolina. The facility is scheduled to come on line and transition our current 143,000 square foot distribution center located in Santa Fe Springs, California during the fourth quarter 2006. The Company will begin shipping from its new distribution center in January 2007 and is estimating a $4 million capital expenditures budget for this project. The new facility will provide additional capacity for the Company’s continued growth as well as achieve cost efficiencies not available in our current distribution center.

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, 2006. Dial in information is as follows: U.S. Toll Free: 1-800-434-1335. Participant code (to be given to the operator): 273399#. 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: 1-800-428-6220, Participant code: 547360#.

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 166 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 131 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,
	2006		2005
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	740,000	$	427,000
Receivables, net		1,061,000		555,000
Inventories		57,249,000		51,918,000
Prepaid expenses and other current assets		2,153,000		1,480,000
Deferred income taxes		3,503,000		4,119,000
Total current assets		64,706,000		58,499,000
PROPERTY AND EQUIPMENT, Net		15,118,000		9,357,000
INTANGIBLE ASSETS, Net		4,387,000		172,000
GOODWILL		3,131,000		-
DEFERRED INCOME TAXES		1,835,000		366,000
OTHER ASSETS		358,000		358,000
TOTAL	$	89,535,000	$	68,752,000
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings	$	17,417,000	$	8,811,000
Current portion of long-term debt		1,882,000		247,000
Accounts payable		15,222,000		12,628,000
Income taxes payable		-		-
Accrued expenses and other current liabilities		4,926,000		4,977,000
Total current liabilities		39,447,000		26,663,000
NOTES PAYABLE		4,360,000		265,000
CAPITAL LEASE OBLIGATIONS		12,000		209,000
DEFERRED RENT AND LEASE INCENTIVES		1,533,000		1,240,000
DEFERRED GAIN ON SALE-LEASEBACK		182,000		235,000
Total liabilities		45,534,000		28,612,000
STOCKHOLDERS' EQUITY		44,001,000		40,140,000
TOTAL	$	89,535,000	$	68,752,000

BIG DOG HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended
	March 31,
	2006					2005
NET SALES	$	38,671,000		100.0	%	$	31,345,000		100.0	%
COST OF GOODS SOLD		18,574,000		48.0	%		15,118,000		48.2	%
GROSS PROFIT		20,097,000		52.0	%		16,227,000		51.8	%
OPERATING EXPENSES:
Selling, marketing and distribution		21,540,000		55.7	%		17,419,000		55.6	%
General and administrative		2,020,000		5.2	%		1,639,000		5.2	%
Depreciation and amortization		1,326,000		3.4	%		952,000		3.0	%
Total operating expenses		24,886,000		64.4	%		20,010,000		63.8	%
LOSS FROM OPERATIONS		(4,789,000	)	(12.4	%)		(3,783,000	)	(12.1	%)
INTEREST INCOME		2,000		0.0	%		40,000		0.1	%
INTEREST EXPENSE		(269,000	)	(0.7	%)		(151,000	)	(0.5	%)
LOSS BEFORE BENEFIT FROM INCOME TAXES		(5,056,000	)	(13.1	%)		(3,894,000	)	(12.4	%)
BENEFIT FROM INCOME TAXES		(1,896,000	)	(4.9	%)		(1,480,000	)	(4.7	%)
NET LOSS	$	(3,160,000	)	(8.2	%)	$	(2,414,000	)	(7.7	%)
NET LOSS PER SHARE
BASIC	$	(0.35	)			$	(0.26	)
DILUTED	$	(0.35	)			$	(0.26	)
WEIGHTED AVERAGE SHARES OUTSTANDING:
BASIC		9,092,000					9,180,000
DILUTED		9,092,000					9,180,000