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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2003
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 0-22963
BIG DOG HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 52-1868665
(State or jurisdiction of (IRS employer
incorporation or organization) identification no.)
121 GRAY AVENUE
SANTA BARBARA, CALIFORNIA 93101
(Address of principal executive offices) (zip code)
(805) 963-8727
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
__X_Yes ___ No
The number of shares outstanding of the registrant's common stock, par value
$.01 per share, at May 1, 2003 was 8,320,232 shares.
BIG DOG HOLDINGS, INC. AND SUBSIDIARIES
INDEX TO FORM 10-Q
PAGE
NO.
----
PART 1. FINANCIAL INFORMATION (Unaudited).........................3
ITEM 1: FINANCIAL STATEMENTS (Unaudited)
CONSOLIDATED BALANCE SHEETS
March 31, 2003 and December 31,2002.......................3
CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended March 31, 2003 and 2002................4
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended March 31, 2003 and 2002................5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS................6
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.......................8
ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK..............................................10
ITEM 4: CONTROLS AND PROCEEDURES.................................10
PART II. OTHER INFORMATION........................................11
ITEM 1: LEGAL PROCEEDINGS........................................11
ITEM 2: CHANGES IN SECURITIES....................................11
ITEM 3: DEFAULTS UPON SENIOR SECURITIES..........................11
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS......11
ITEM 5: OTHER INFORMATION........................................11
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K.........................11
SIGNATURES ..........................................................12
SECTION 302 CERTIFICATIONS................................................13
PART 1. .........FINANCIAL INFORMATION
ITEM 1: .........FINANCIAL STATEMENTS
BIG DOG HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2003 2002
------------------ -----------------
(Unaudited)
ASSETS (Note 2)
CURRENT ASSETS:
Cash and cash equivalents........................................ $ 1,143,000 $ 6,194,000
Accounts receivable, net......................................... 168,000 459,000
Inventories...................................................... 29,797,000 24,808,000
Prepaid expenses and other current assets........................ 949,000 457,000
Deferred income taxes............................................ 3,728,000 1,960,000
------------------ ------------------
Total current assets........................................... 35,785,000 33,878,000
PROPERTY AND EQUIPMENT, Net......................................... 4,886,000 5,234,000
INTANGIBLE ASSETS, Net.............................................. 135,000 149,000
OTHER ASSETS........................................................ 381,000 418,000
------------------ ------------------
TOTAL............................................................... $41,187,000 $ 39,679,000
================== ==================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings............................................ $ 2,637,000 $ ---
Accounts payable................................................. 5,742,000 1,935,000
Income taxes payable............................................. 14,000 555,000
Accrued expenses and other current liabilities................... 2,568,000 4,159,000
------------------ ------------------
Total current liabilities...................................... 10,961,000 6,649,000
DEFERRED RENT....................................................... 653,000 693,000
DEFERRED GAIN ON SALE-LEASEBACK..................................... 340,000 354,000
------------------ ------------------
Total liabilities................................................ 11,954,000 7,696,000
------------------ ------------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value, 3,000,000 shares authorized, none
issued and outstanding......................................... $ --- $ ---
Common stock, $.01 par value, 30,000,000 shares authorized,
9,698,284 issued at March 31, 2003 and December 31, 2002....... 97,000 97,000
Additional paid-in capital....................................... 20,510,000 20,510,000
Retained earnings................................................ 16,074,000 18,824,000
Treasury stock, 1,305,636 shares at March 31, 2003 and December 31,
2002........................................................... (7,448,000) (7,448,000)
------------------ ------------------
Total stockholders' equity..................................... 29,233,000 31,983,000
------------------ ------------------
TOTAL............................................................... $ 41,187,000 $ 39,679,000
================== ==================
See notes to the consolidated financial statements.
BIG DOG HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended
March 31,
--------------------------------------
2003 2002
----------------- -----------------
NET SALES.................................................... $ 15,354,000 $ 17,546,000
COST OF GOODS SOLD........................................... 7,251,000 8,280,000
----------------- -----------------
GROSS PROFIT................................................. 8,103,000 9,266,000
----------------- -----------------
OPERATING EXPENSES:
Selling, marketing and distribution...................... 11,311,000 11,836,000
General and administrative............................... 1,201,000 1,224,000
----------------- -----------------
Total operating expenses............................. 12,512,000 13,060,000
----------------- -----------------
LOSS FROM OPERATIONS.......................................... (4,409,000) (3,794,000)
INTEREST EXPENSE, NET......................................... 62,000 81,000
----------------- -----------------
LOSS BEFORE BENEFIT FROM INCOME TAXES......................... (4,471,000) (3,875,000)
BENEFIT FROM INCOME TAXES..................................... (1,721,000) (1,492,000)
----------------- -----------------
NET LOSS...................................................... $ (2,750,000) $ (2,383,000)
================= =================
NET LOSS PER SHARE
BASIC AND DILUTED........................................... $ (0.33) $ (0.28)
================= =================
WEIGHTED AVERAGE SHARES OUTSTANDING
BASIC AND DILUTED......................................... 8,393,000 8,460,000
================= =================
See notes to the consolidated financial statements.
BIG DOG HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended
March 31,
--------------------------------------
2003 2002
---------------- ------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss........................................................... $ (2,750,000) $ (2,383,000)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization................................... 571,000 666,000
Amortization of deferred financing fees......................... 38,000 35,000
Provision for losses on receivables............................. 13,000 8,000
Loss on disposition of property and equipment................... 8,000 ---
Deferred income taxes........................................... (1,768,000) (1,522,000)
Changes in operating assets and liabilities:
Receivables............................................... 278,000 238,000
Inventories................................................ (4,989,000) (3,667,000)
Prepaid expenses and other assets.......................... (492,000) (284,000)
Accounts payable........................................... 3,807,000 512,000
Income taxes payable....................................... (541,000) (1,983,000)
Accrued expenses and other current liabilities............. (1,591,000) (1,879,000)
Deferred rent.............................................. (40,000) 67,000
Deferred gain on sale-leaseback............................ (14,000) (13,000)
---------------- ------------------
Net cash used in operating activities................... (7,470,000) (10,205,000)
---------------- ------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures................................................. (213,000) (189,000)
Other................................................................ (5,000) (9,000)
---------------- ------------------
Net cash used in investing activities....................... (218,000) (198,000)
---------------- ------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term borrowings, net.......................................... 2,637,000 8,346,000
Repurchase of common stock.......................................... ---- (242,000)
---------------- -----------------
Net cash provided by financing activities......................... 2,637,000 8,104,000
---------------- ------------------
NET DECREASE IN CASH..................................................... (5,051,000) (2,299,000)
CASH, BEGINNING OF PERIOD................................................ 6,194,000 3,055,000
----------------- ------------------
CASH, END OF PERIOD...................................................... $ 1,143,000 $ 756,000
================ ===================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for:
Interest........................................................ $ 25,000 $ 52,000
Income taxes.................................................... $ 588,000 $ 2,013,000
See notes to the consolidated financial statements.
BIG DOG HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
NOTE 1. Basis of Presentation:
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements.
In the opinion of management, all adjustments, consisting only of
normal recurring entries necessary for a fair presentation have been included.
Operating results for the three-month period ended March 31, 2003 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2003. For further information, refer to the financial statements
and footnotes thereto for Big Dog Holdings, Inc. and its subsidiaries (the
"Company") included in the Company's Annual Report on Form 10-K for the year
ended December 31, 2002.
NOTE 2. Accounting for Stock-Based Compensation
Statement of Financial Accounting Standards ("SFAS") No. 123,
Accounting for Stock-Based Compensation, as amended by SFAS No. 148,
Accounting for Stock-Based Compensation, requires companies to estimate
employee stock compensation expense based on the fair value method of
accounting. However, the statement allows the alternative of continued use of
the intrinsic value method described in Accounting Principles Board ("APB")
Opinion No. 25, Accounting for Stock Issued to Employees, if pro forma
disclosure of fair value amounts is provided. The Company has elected the
alternative of continued use of APB Opinion No. 25.
The following table illustrates the effect on net income and earnings
per share as if the fair value based method had been applied to all outstanding
and unvested stock option awards in each period presented:
Three Months Ended
March 31,
--------------------------------------
2003 2002
---------------- ------------------
Net loss:
As reported................................................. $ (2,750,000) $(2,383,000)
Pro forma................................................... (2,913,000) (2,560,000)
Net loss per share:
As reported:
Basic and diluted........................................... $ (0.33) $ (0.28)
Pro forma:
Basic and diluted........................................... $ (0.35) $ (0.30)
NOTE 3. Short-term Borrowings
In October 2001, the Company entered into a $30.0 million three-year
line of credit facility with Wells Fargo RetaiL Finance. This facility is
collateralized by substantially all of the Company's assets and requires daily,
weekly and monthly financial reporting as well as compliance with financial,
affirmative and negative covenants. This credit agreement provides for a
performance-pricing structured interest charge, ranging up to LIBOR plus 1.75%
which is based on excess availability levels. As of March 31, 2003, the
Company had $2.6 million outstanding under this credit agreement.
Additionally, the Company had $0.6 million of letters of credit outstanding as
of March 31, 2003. The letters of credit expire through December 2003.
NOTE 4. Stockholder's Equity
In March 1998, the Company announced that its Board authorized the
repurchase of up to $10,000,000 of its common stock. As of March 31, 2003, the
Company has repurchased 1,305,636 shares totaling $7,448,000. In April 2003,
the Company repurchased 72,416 shares of common stock totaling $174,000.
NOTE 5. No Change in Listing
The Company was informed by the NASDAQ that the Company's shares of
common stock could be listed on the NASDAQ Small Cap Market or over the counter
on the OTCBB, rather than on the National Market, unless they traded above a
certain price for a designated period. The Company's shares have now met that
requirement and will therefore remain listed on the NASDAQ National Market.
NOTE 6. Recently Issued Accounting Standards
In June 2001, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 143, Accounting for Asset Retirement Obligations, which provides
standards on the accounting for obligations associated with the retirement of
long-lived assets. SFAS No. 143 is effective for fiscal years beginning after
June 15, 2002. The adoption of this statement did not have a significant
impact on the Company's consolidated financial statements.
In July 2001, the FASB issued SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets. SFAS No. 144 addresses financial
accounting and reporting for the impairment or disposal of long-lived assets.
This Statement supercedes SFAS No. 121 on the same topic and the accounting
and certain reporting provisions of APB Opinion No. 30, Reporting the Results
of Operations--Reporting the Effects of Disposal of a Segment of a Business,
and Extraordinary, Unusual and Infrequently Occurring Events and Transactions,
for the disposal of a segment of a business (as defined in that Opinion). This
Statement also amends Accounting Research Bulletin No. 51, Consolidated
Financial Statements, to eliminate the exception to consolidation for a
subsidiary for which control is likely to be temporary. SFAS No. 144 is
effective for fiscal periods beginning after December 15, 2001. The Company
implemented the pronouncement beginning in the first quarter of fiscal year
2002. The adoption of this statement did not have an impact on the Company's
consolidated financial statements.
In June 2002, the FASB issued SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities, which addresses exit or disposal
activities including one-time involuntary employee termination benefits,
contract termination costs and costs to consolidate facilities or relocate
employees. Existing accounting guidelines (principally Emerging Issue Task
Force Issue 94-3, Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity) require companies to recognize a
liability when management commits itself or announces plans to exit or dispose
of an activity. SFAS No. 146 will prohibit companies from recognizing an exit
or disposal liability until the liability has been incurred, generally the
"communication date" for one-time termination benefits and the contract
termination or "cease use date" for contract costs, and will require these
liabilities to be measured at fair value. This statement is effective for
exit or disposal activities initiated after December 31, 2002. The adoption of
the provisions of this statement did not have a significant impact on our
consolidated financial statements.
In December 2002, the FASB issued SFAS No. 148. SFAS No. 123, as
amended by SFAS No. 148, requires companies to estimate employee stock
compensation expense based on the fair value method of accounting. However, the
statement allows the alternative of continued use of the intrinsic value method
described in APB Opinion No. 25, if pro forma disclosure of fair value amounts
is provided. The Company has elected the alternative of continued use of APB
Opinion No. 25. See Note 2.
In November 2002, the FASB issued FASB Interpretation No. 45,
Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others, which elaborates on required
disclosures by a guarantor in its financial statements about obligations under
certain guarantees that it has issued and clarifies the need for a guarantor to
recognize, at the inception of certain guarantees, a liability for the fair
value of the obligation undertaken in issuing the guarantee. The Company
adopted the provisions of this Interpretation relating to initial recognition
and measurement of guarantor liabilities, which are effective for qualifying
guarantees entered into or modified after January 1, 2003. The disclosure
requirements in this Interpretation are effective for financial statements of
interim or annual periods ending after December 15, 2002. The adoption of this
interpretation did not have a impact on the Company's consolidated financial
statements.
In January 2003, the FASB issued FASB Interpretation No. 46,
Consolidation of Variable Interest Entities, which addresses consolidation by a
business of variable interest entities in which it is the primary beneficiary.
The Interpretation is effective immediately for certain disclosure requirements
and variable interest entities created after January 31, 2003, and for the
quarter ended September 27, 2003 for all other variable interest entities. The
Company adopted the provisions of this Interpretation and it did not have a
significant impact on the Company's consolidated financial statements.
ITEM 2:
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management's discussion and analysis should be read in conjunction
with the Company's financial statements and notes related thereto.
Certain minor differences in the amounts below result from rounding of the
amounts shown in the consolidated financial statements.
This quarterly report on Form 10-Q contains forward-looking statements
within the meaning of federal securities laws, which are intended to be
covered by the safe harbors created thereby. Those statements include, but may
not be limited to, the discussions of the Company's operating and growth
strategy. Investors are cautioned that all forward-looking statements involve
risks and uncertainties including, without limitation, those set forth
under the caption "risk factors" in the business section of the Company's
annual report on Form 10-K for the year ended December 31, 2002. Although the
Company believes that the assumptions underlying the forward-looking statements
contained herein are reasonable, any of the assumptions could prove to be
inaccurate, and therefore, there can be no assurance that the forward-looking
statements included in this quarterly report on Form 10-Q will prove to be
accurate. In light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such information
should not be regarded as a representation by the Company or any other person
that the objectives and plans of the company will be achieved. The Company
undertakes no obligation to publicly release any revisions to any
forward-looking statements contained herein to reflect events and circumstances
occurring after the date hereof or to reflect the occurrence of unanticipated
events.
The following discussion should be read in conjunction with the
Company's unaudited financial statements and notes thereto included elsewhere
in this quarterly report on form 10-Q, and the annual audited financial
statements and notes thereto included in the Company's annual report on
Form 10-K for the year ended December 31, 2002 filed with the Securities and
Exchange Commission.
RESULTS OF OPERATIONS
Three Months Ended March 31, 2003 and 2002
NET SALES. Net sales consist of sales from the Company's stores,
catalog, internet website, and wholesale accounts, all net of returns and
allowances. Net sales decreased to $15.4 million for the three months ended
March 31, 2003 from $17.5 million for the same period in 2002, a decrease of
$2.1 million, or 12.0%. Of the decrease, $1.9 million was attributable to a
12.4% comparable stores sales decrease, $0.1 million was attributable to a
decrease in sales for stores not yet qualifying as comparable stores (includes
new store openings which is netted against store closures), and
$0.1 million was attributable to a decrease in the Company's wholesale
business. The decrease in comparable store sales is primarily related to
lower traffic in our stores due to the calendar shift of the Easter holiday
between years. In 2002, the Easter holiday fell in the first quarter, while
in 2003 the Easter holiday fell in the second quarter.
GROSS PROFIT. Gross profit decreased to $8.1 million for the three
months ended March 31, 2003 from $9.3 million for the same period in 2002, a
decrease of $1.2 million, or 12.9%. As a percentage of net sales, gross profit
remained constant at 52.8% in the three months ended March 31, 2003 and 2002.
SELLING, MARKETING AND DISTRIBUTION EXPENSES. Selling, marketing and
distribution expenses consist of expenses associated with creating,
distributing and selling products through all channels of distribution,
including occupancy, payroll and catalog costs. Selling, marketing and
distribution expenses decreased to $11.3 million in the three months ended
March 31, 2003 from $11.8 million in the same period for 2002, a decrease of
$0.5 million, or 4.2%. The decrease in selling, marketing and distribution
expenses is primarily attributable to retail cost expense reductions,
particularly lease occupancy expenses, as well as lower depreciation expense.
As a percentage of net sales, these expenses increased to 73.7% in the three
months ended March 31, 2003 from 67.5% in the same period in 2002, an increase
of 6.2%. The increase as a percentage of net sales is a result of having a
lower sales base, which is primarily related to the decrease in comparable
store sales.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative
expenses consist of administrative salaries, corporate occupancy costs and
other corporate expenses. General and administrative expenses for the three
months ended March 31, 2003 and 2002 remained constant at $1.2 million. As a
percentage of net sales, these expenses increased to 7.8% in the three months
ended March 31, 2003 from 7.0% in the same period in 2002. The increase as a
percentage of net sales is a result of having a lower sales base, which is
primarily related to the decrease in comparable store sales.
INTEREST EXPENSE. Interest expense for the three months ended March
31, 2003 and 2002 remained constant at $0.1 million.
INCOME TAXES. The Company recorded an income tax benefit at its
historical effective income tax rate of 38.5%. The Company believes it will
fully realize this benefit due to projected seasonal net income in the third
and forth quarters as discussed in "Seasonality" below, or from net operating
loss carrybacks to previous years.
LIQUIDITY AND CAPITAL RESOURCES
During the first quarter of 2003, the Company's primary uses of cash
were for merchandise inventories, accrued liabilities and income taxes. The
Company satisfied its cash requirements from existing cash balances and
short-term borrowings under its credit agreement.
Cash used in operating activities was $7.5 million and $10.2 million
for the three months ended March 31, 2003 and 2002, respectively. The reduction
in cash used in operating activities is principally due to an increase in
accounts payable and other current liabilities.
Cash used in investing activities for the three months ended March 31,
2003 and 2002 remained constant at $0.2 million. Cash flows used in investing
activities in the first quarter of 2003 and 2002 primarily related to capital
additions to the Company's existing stores.
Cash provided by financing activities decreased to $2.6 million in the
three months ended March 31, 2003 from $8.1 million in the same period in 2002.
In the three months ended March 31, 2003, the Company had net borrowings of
$2.6 million under its borrowing agreement. In the three months ended March
31, 2002, the Company had net borrowings of $8.3 million under its borrowing
agreement and used $0.2 million to repurchase common stock.
In October 2001, the Company entered into a $30.0 million three-year
line of credit facility with Wells Fargo Retail Finance. This facility is
collateralized by substantially all of the Company's assets and requires daily,
weekly and monthly financial reporting as well as compliance with financial,
affirmative and negative covenants. This credit agreement provides for a
performance-pricing structured interest charge, ranging up to LIBOR plus 1.75%
which is based on excess availability levels. As of March 31, 2003, the
Company had $2.6 million outstanding under this credit agreement.
Additionally, the Company had $0.6 million of letters of credit outstanding as
of March 31, 2003. The letters of credit expire through December 2003.
The Company has made no changes to its critical accounting policies as
disclosed in the Annual Report on Form 10-K for the year ended December 31,
2002.
COMMITMENTS AND OBLIGATIONS
As of March 31, 2003, we had the following obligations:
Amounts of Commitment Expiration per Period
---------------------------------------------
Total
Amounts Less than 1
Committed year 1 to 3 years 4 to 5 years Over 5 years
--------- ----------- ------------ ------------ ------------
Contractual Obligations:
Operating leases............................ $46,715,000 $15,716,000 $25,406,000 $3,924,000 $1,669,000
Other Commercial Commitments:
Letters of credit.......................... 319,000 319,000 --- --- ---
Standby letters of credit.................. 315,000 315,000 --- --- ---
----------- ----------- ---------- ---------- ---------
Total Commitments.............................. $47,349,000 $16,350,000 $25,406,000 $3,924,000 $1,669,000
=========== =========== =========== ========== ==========
SEASONALITY
The Company believes its seasonality is somewhat different than many
apparel retailers since a significant number of the Company's stores are
located in tourist areas and outdoor malls that have different visitation
patterns than urban and suburban retail centers. The third and fourth quarters (
consisting of the summer vacation, back-to-school and Christmas seasons)
have historically accounted for the largest percentage of the Company's annual
sales and profits. The Company has historically incurred operating losses in
its first quarter and may be expected to do so in the foreseeable future.
ITEM 3:
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company does not believe it has material exposure to losses from
market-rate sensitive instruments. The Company has not invested in derivative
financial instruments. The Company has a credit facility with a
performance-pricing structured interest charge, ranging up to LIBOR plus 1.75%
based on excess availability levels. See "Item 2. Management's Discussion and
Analysis of Financial Condition and Results of Operations-Liquidity and Capital
Resources."
ITEM 4:
CONTROLS AND PROCEDURES
Within 90 days prior to the date of this report, the Company completed
an evaluation, under the supervision and with the participation of the Company's
chief executive officer and chief financial officer of the effectiveness of the
Company's disclosure controls and procedures pursuant to Rule 13a-14 of the
Exchange Act. Based on this evaluation, the Company's chief executive officer
and chief financial officer concluded that the Company's disclosure controls
and procedures were effective with respect to timely communicating to them all
material information required to be disclosed in this report as it related to
the Company and its subsidiaries. There have been no significant changes in the
Company's internal controls or in other factors that could significantly affect
the internal controls subsequent to the date the Company completed this
evaluation.
PART II. OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
The Company is involved from time to time in litigation
incidental to its business. The Company believes that the
outcome of such litigation will not have a material adverse
effect on its operation or financial condition.
ITEM 2: CHANGES IN SECURITIES
Not applicable
ITEM 3: DEFAULTS UPON SENIOR SECURITIES
Not applicable
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable
ITEM 5: OTHER INFORMATION
Not applicable
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit
99.1 Certification of Chief Executive Officer
Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
99.2 Certification of Chief Financial Officer
Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
(b) Reports on Form 8-K
Not applicable
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 thereunto duly authorized.
BIG DOG HOLDINGS, INC.
May 13, 2003 /s/ ANDREW D. FESHBACH
----------------------
Andrew D. Feshbach
President and Chief Executive Officer
Principal Executive Officer)
May 13, 2003 /s/ ROBERTA J. MORRIS
---------------------
Roberta J. Morris
Chief Financial Officer and Treasurer
(Principal Financial Officer)
BIG DOG HOLDINGS, INC.
CERTIFICATION CHIEF EXECUTIVE OFFICER
I, Andrew Feshbach, CEO, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Big Dog
Holdings, Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not
misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for,
the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14)
for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiary, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors
and the audit committee of registrant's board of directors (or
persons performing the equivalent function):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of
our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
May 13, 2003
/s/ ANDREW D. FESHBACH
----------------------
Andrew D. Feshbach
President and Chief Executive Officer
BIG DOG HOLDINGS, INC.
CERTIFICATION CHIEF FINANCIAL OFFICER
I, Roberta Morris, CFO, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Big Dog
Holdings, Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not
misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for,
the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14)
for the registrant and we have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiary, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors
and the audit committee of registrant's board of directors (or
persons performing the equivalent function):
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated
in this quarterly report whether or not there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of
our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
May 13, 2003
/s/ ROBERTA J. MORRIS
---------------------
Roberta J. Morris
Chief Financial Officer and Treasurer