Gander Mountain Company fourth quarter 2005, sales increased 18% to $280.8 million. Income from operations increased 37% to $26.0 million, while the net income for the fourth quarter of fiscal 2005 increased 26% to a record $22.2 million, compared to net income of $17.5 million for the fourth quarter of fiscal 2004.

“The record fourth quarter results reflect our ability to manage our business profitably,” said Mark Baker, President and CEO. “We are encouraged by the early results from initiatives we launched in 2005 that gained traction in the fourth quarter. We look forward to a balance of growth and improved profitability in 2006.”

Sales in November and December were positively impacted by strong sales of equipment and fieldwear during the hunting seasons and solid sales during the holiday period. In January 2006, sales were negatively impacted by considerably less clearance activity due to improved inventory management. In addition, the ice fishing business was extremely challenging in January as the ice on the lakes in many markets was considered unsafe.

For the fiscal year ended January 28, 2006, sales increased 25 percent to $804.5 million. The net loss for the fiscal year was $13.3 million, compared with net income of $1.6 million for fiscal 2004. Comparable store sales decreased 7.4% in the quarter and 6.0% for the fiscal year.

In fiscal 2005, Gander Mountain opened nineteen new stores and relocated or consolidated three stores, expanding its industry-leading retail network to a total of 98 stores. The company entered four new states in the year — Arkansas, Kansas, Maryland and North Carolina — bringing the total number of states to 18. The company anticipates opening six to eight new stores in 2006, including two relocations.

On a GAAP basis, basic and diluted net income per share for the fourth quarter of fiscal 2005 were $1.55 and $1.45, respectively, compared with basic and diluted net income per share of $1.23 and $1.21, respectively, for the fourth quarter of fiscal 2004. For the full fiscal year 2005, on a GAAP basis, basic and diluted net loss per share was $0.93 compared with basic and diluted net loss per share of $0.25 for the 2004 fiscal year.

On April 26, 2004, Gander Mountain closed its initial public offering of 6,583,750 shares of its common stock and converted existing preferred stock to common stock. Giving effect to the conversion of preferred shares and the application of the net proceeds of the offering as of the beginning of each period presented, pro-forma basic and diluted net loss per share for the fiscal year 2005 were $0.93, compared with pro-forma basic and diluted net income per share of $0.18 and $0.17, respectively, for fiscal year 2004.

On March 3, 2006, the Company amended and restated its credit facility with Bank of America, N.A., as administrative agent, and the lenders named therein. The Company's revolving credit facility provides a maximum credit ceiling of $275 million, which may be increased to $300 million subject to certain terms and conditions. The principal purpose of the amendment was to add a $20 million term loan to the credit facility. The amount of the term loan is not deducted in determining availability under the revolving credit facility, except to the extent that the balance of the term loan exceeds approximately 4% to 5% of the eligible borrowing base. This facility together with operating cash flow will provide the Company flexibility to fund its growth in 2006.


                           Gander Mountain Company
                           Statements of Operations
                    (In thousands, except per share data)

                               13 Weeks Ended            52 Weeks Ended
                           January 28,  January 29,  January 28,  January 29,
                              2006         2005         2006         2005
                           (Unaudited)  (Unaudited)  (Unaudited)

    Sales                   $280,822     $238,996     $804,474     $644,014
    Cost of goods sold       204,949      174,121      612,029      479,662
    Gross profit              75,873       64,875      192,445      164,352

    Operating expenses:
      Store operating
       expenses               40,950       37,261      154,542      121,575
      General and
       administrative
       expenses                8,885        8,272       33,549       27,876
      Pre-opening expenses         -          277        6,555        8,194
    Income (loss) from
     operations               26,038       19,065       (2,201)       6,707
    Interest expense, net      3,856        1,522       11,106        5,137
    Income (loss) before
     income taxes             22,182       17,543      (13,307)       1,570
    Income tax provision           -            -            -            -
    Net Income (loss)         22,182       17,543      (13,307)       1,570
    Less preferred stock
     dividends                     -            -            -        4,305
    Income (loss) applicable
     to common shareholders  $22,182      $17,543     $(13,307)     $(2,735)

    Income (loss) per common
     share
      Basic                    $1.55        $1.23       $(0.93)      $(0.25)
      Diluted                  $1.45        $1.21       $(0.93)      $(0.25)

    Weighted average common
     shares outstanding
      Basic                   14,271       14,222       14,257       11,092
      Diluted                 15,539       14,482       14,257       11,092