Big Dog Holdings Inc (Nasdaq:BDOG), a developer, marketer and retailer of branded, lifestyle consumer products, today reported the financial results for the second quarter ended June 30, 2000.

Financial Results

For the quarter ended June 30, 2000, net income increased 41 per cent to a second-quarter record of $1,038,000, as compared with $734,000 for the second quarter 1999. Earnings per share increased 50 per cent to $.09, as compared with $.06 for the same period last year.

Net sales increased to $26,205,000 as compared with $24,093,000 in the second quarter 1999. The increase in net income is attributable to improvement in operating efficiencies and increased revenue, partially offset by a small decrease in gross margin.

At the close of the quarter, the company had 199 retail stores, representing a net increase of 18 stores since June 30, 1999. Notably, the company's comparable stores sales growth was 2.1 per cent for the second quarter.

Commenting on the results, CEO Andrew Feshbach stated: "We believe we are in a strong position with our fall merchandise and look forward to the second half of the year, which has always been the strongest and most profitable for our company."

$22m Cash Tender Offer for 3.5 Million Shares at $6.25 Per Share

Today, the company launched a cash tender offer to purchase 3.5 million shares of Big Dogs' common stock (approximately 30 per cent of the outstanding shares) at $6.25 per share, representing approximately a 35 per cent premium to the July 28 closing price.

The terms of the tender offer, which is expected to close and fund in approximately one month's time, will be described in the offering materials that will be mailed to stockholders later this week. If more than 3.5 million shares are tendered, there will be a proration of the tendered shares.

Big Dogs will finance the tender offer through available cash and a new $30m revolving line of credit led by Bank of America, which will also act as Big Dogs' primary lender. Israel Discount Bank, Big Dogs' historical lender, and Santa Barbara Bank and Trust, a leading California Central Coast lender, are also participating.

Commenting on the tender offer, Feshbach stated: "Over the past year, the company has considered various strategic and financial alternatives to enhance stockholder value. Our board and its advisers concluded that this tender offer is the best approach for providing liquidity to those stockholders who desire to sell, while also providing long-term potential for all stockholders."

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.

In addition to its 198 retail stores, Big Dogs markets its products through its catalog, better wholesale accounts and Internet sales.