BIG DOG HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31
2005       2004
ASSETS
CURRENT ASSETS:      
Cash and cash equivalents
$3,530,000
      
$4,670,000
Receivables, net
894,000
      
411,000
Inventories
44,518,000
      
39,581,000
Prepaid expenses and other current assets
1,046,000
      
928,000
Deferred income taxes
1,681,000
      
1,691,000
Total current assets
51,669,000
      
47,281,000
PROPERTY AND EQUIPMENT, Net
11,931,000
      
9,956,000
INTANGIBLE ASSETS, Net
GOODWILL
4,473,000
3,131,000
      
172,000
---------
DEFERRED INCOME TAXES
1,187,000
      
1,042,000
OTHER ASSETS
362,000
      
380,000
TOTAL
$72,753,000
      
$58,831,000
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:      
Short-term borrowings
Current portion of long-term debt
Accounts payable
$ 2,796,000
1,775,000
7,478,000
      
$304,000
243,000
5,033,000
Income taxes payable
1,367,000
      
2,643,000
Accrued expenses and other current liabilities
6,615,000
      
6,331,000
Total current liabilities
20,031,000
      
14,554,000
NOTES PAYABLE
CAPITAL LEASE OBLIGATIONS
4,565,000
47,000
      
289,000
256,000
DEFERRED RENT & LEASE INCENTIVES
DEFERRED GAIN ON SALE-LEASEBACK
1,468,000
195,000
      
943,000
248,000
Total liabilities
26,306,000
      
16,290,000
STOCKHOLDERS' EQUITY
46,447,000
      
42,541,000
TOTAL
$72,753,000
      
$58,831,000

BIG DOG HOLDINGS, INC. AND SUBSIDIARIES
  
CONSOLIDATED STATEMENTS OF OPERATIONS
  
Three Months Ended
  
Year Ended
  
December 31
December 31
  
2005   2004 2005   2004
NET SALES $59,420,000   $55,739,000 $179,115,000   $161,358,000
COST OF GOODS SOLD 26,809,000   24,799,000 80,311,000   72,733,000
GROSS PROFIT 32,611,000   30,940,000 98,804,000   88,625,000
OPERATING EXPENSES:  
Selling, marketing and distribution 22,975,000   21,585,000 80,624,000   73,956,000
General and administrative 3,395,000   2,516,000 9,631,000   8,060,000
Total operating expenses 26,370,000   24,101,000 90,255,000   82,016,000
INCOME FROM OPERATIONS
OTHER INCOME
6,241,000
-------------
  
6,839,000
-------------
8,549,000
-------------
  
6,609,000
82,000
INTEREST INCOME 2,000   1,000 44,000   26,000
INTEREST EXPENSE (358,000)   (238,000) (976,000)   (857,000)
INCOME BEFORE PROVISION  
FOR INCOME TAXES 5,885,000   6,602,000 7,617,000   5,860,000
PROVISION FOR INCOME TAXES 2,236,000   2,453,000 2,894,000   2,172,000
NET INCOME $3,649,000   $4,149,000 $4,723,000   $3,688,000
NET INCOME PER SHARE:
BASIC $ 0.40   $ 0.45 $ 0.52   $ 0.42
DILUTED $ 0.38   $ 0.43 $ 0.49   $ 0.40
WEIGHTED AVERAGE SHARES OUTSTANDING:
BASIC 9,075,000   9,178,000 9,145,000   8,722,000
DILUTED 9,664,000   9,732,000 9,726,000   9,174,000