Gander Mountain Company third quarter sales increased 5.3% to $259.5 million and comparable store sales decreased 8.4% versus the third quarter of the prior year. For the quarter, the company reported a net loss of $5.1 million, or 25 cents per share, compared to net income of $2.0 million, or 14 cents per share, in the third quarter of fiscal 2006, which included a $1.4 million recovery of an insurance settlement, or 10 cents per share.

For the 39 weeks ended November 3, 2007, the company reported sales of $651.8 million, an increase of 11.5 percent over the same period in 2006. Comparable store sales declined 1.9 percent. The company reported a net loss for the 39-week period of $37.6 million, or $1.86 per share, compared with a net loss of $28.5 million, or $1.99 per share for the 39 weeks ended October 28, 2006.

“These third quarter results were disappointing, coming off a solid first half. They reflect both warm weather across northern states, which affects our critical fall hunting seasons, and soft consumer demand across our store base,” said Mark Baker, president and CEO. “While sales performance has continued to be challenging in the fourth quarter, we are managing our costs carefully in light of continued softness in consumer discretionary purchases.”

Third Quarter 2007 Financial Highlights:

The company completed its store opening program for the year by adding 9 stores, including 2 replacement stores, during the third quarter, bringing the number of stores operated at the close of the third quarter to 115.

Gross profit increased 11.4% to $70.1 million for the quarter. As a percent of sales, gross profit increased 149 basis points to 27.0%, reflecting general improvement in pricing structure, clearance management, and higher penetration of owned-brand merchandise.

Store operating expenses increased 19.8% to $53.4 million, driven by new store growth over the last year. As a percent of sales, store operating expenses increased from 18.1% in quarter three of 2006, to 20.6% in the comparable quarter this year, as a result of the decrease in comparable store sales.

In the third quarter, general and administrative expense (G&A) was $13.1 million, an increase of 25.1%. As a percent of sales, G&A increased 80 basis points to 5.1%, due primarily to severance costs of $1.2 million in the third quarter.


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

                                        13 Weeks Ended      39 Weeks Ended
                                       November  October   November  October
                                          3,        28,        3,       28,
                                         2007      2006      2007      2006
    Sales                              $259,539  $246,491  $651,799  $584,553
    Cost of goods sold                  189,445   183,594   496,293   450,590
    Gross profit                         70,094    62,897   155,506   133,963

    Operating expenses:
       Store operating expenses          53,392    44,553   137,671   116,880
       General and administrative
        expenses                         13,128    10,490    36,281    29,449
       Pre-opening expenses               3,174     1,772     5,138     3,245
       Gain on insurance settlement           –    (1,400)        –    (1,400)
    Income (loss) from operations           400     7,482   (23,584)  (14,211)
    Interest expense, net                 5,543     5,456    14,049    14,289
    Income (loss) before income taxes    (5,143)    2,026   (37,633)  (28,500)
    Income tax provision                      –         –         –         –
    Net income (loss)                   $(5,143)   $2,026  $(37,633) $(28,500)

    Income (loss) per common share
        Basic                            $(0.25)    $0.14    $(1.86)   $(1.99)
        Diluted                          $(0.25)    $0.14    $(1.86)   $(1.99)

    Weighted average common shares
     outstanding
        Basic                            20,362    14,308    20,255    14,295
        Diluted                          20,362    14,325    20,255    14,295