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Dover Saddlery Reports Third Quarter 2011 Financial Results

LITTLETON, MA -- (MARKET WIRE) -- 11/08/11 -- Dover Saddlery, Inc. (NASDAQ: DOVR), the leading multi-channel retailer of equestrian products, today reported financial results for the third quarter ended September 30, 2011.

Total revenues for the third quarter of 2011 increased 4.8%, or $0.9 million, to $19.5 million from $18.6 million. Retail store channel revenues increased 17.6%, or $1.2 million, to $8.2 million and same-store sales increased 9.9% over the same period in 2010. Net income for the third quarter increased 3.8%, or $12,000, to $332,000 while earnings per fully diluted share remained steady at $0.06 per share.

Year-to-Date Results
For the first nine months of 2011, total revenues increased 4.3% to $57.0 million from $54.7 million. Retail store channel revenues increased 16.4% to $21.5 million and same-store sales increased 12.8%. Net income increased 8.8% to $1,084,000, or $0.20 per fully diluted share, from $997,000, or $0.18 per fully diluted share.

"Our retail stores performed extremely well in the third quarter and, in fact, the retail channel has shown strong performance all year long," said Stephen L. Day, President and CEO of Dover Saddlery. "Our new store in Parker, Colorado is exceeding expectations; and next week we will be opening our first store in the Midwest in Libertyville, Illinois, a suburb north of Chicago, bringing the total number of stores to 15."

Business Outlook

Due to the current uncertain economic environment, the Company is not providing any financial guidance.

Conference Call and Webcast
Dover Saddlery will hold a conference call and webcast on Tuesday, November 8, 2011 at 8:30 a.m. ET to discuss its third quarter results. To access the webcast via the Internet, please go to http://investor.shareholder.com/DOVR/events.cfm and click on the webcast icon.

About Dover Saddlery, Inc. Dover Saddlery, Inc. (NASDAQ: DOVR) is the leading multi-channel retailer of equestrian products in the United States. Founded in 1975 in Wellesley, Massachusetts, by United States Equestrian team members, Dover Saddlery has grown to become The Source® for equestrian products. Dover offers a broad and distinctive selection of competitively priced, brand-name products for horse and rider through catalogs, the Internet and company-owned retail stores. Dover Saddlery, Inc. serves the English rider and through Smith Brothers, the Western rider. The Source®, Dover Saddlery® and Smith Brothers® are registered marks of Dover Saddlery.

For more information, please call 1-978-952-8062 or visit www.DoverSaddlery.com.

Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including without limitation statements made about the Company's business outlook for the fourth quarter and full year of fiscal 2011, the prospects for continued retail channel and same store sales growth, and operating income and cash flow improvements, and additional new store openings in 2012. All statements other than statements of historical fact included in this press release regarding the Company's strategies, plans, objectives, expectations, and future operating results are forward-looking statements. Although Dover believes that the expectations reflected in such forward-looking statements are reasonable at this time, it can give no assurance that such expectations will prove to have been correct. These forward-looking statements involve significant risks and uncertainties, including those discussed in this release and others that can be found in "Item 1A Risk Factors" of Dover Saddler's Annual Report on Form 10-K for the fiscal year ended December 31, 2010. Dover Saddlery is providing this information as of this date and does not undertake any obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise. No forward-looking statement can be guaranteed and actual results may differ materially from those Dover Saddlery projects.




                   DOVER SADDLERY, INC. AND SUBSIDIARIES

              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

              (In thousands, except share and per share data)

                                (unaudited)



                               Three Months Ended       Nine Months Ended

                              Sept. 30,   Sept. 30,   Sept. 30,   Sept. 30,

                                2011        2010        2011        2010



Revenues, net- direct        $   11,321  $   11,654  $   35,561  $   36,257

Revenues, net - retail

 stores                           8,184       6,960      21,477      18,438

                             ----------  ----------  ----------  ----------

Revenues, net - total        $   19,505  $   18,614  $   57,038  $   54,695

Cost of revenues                 12,056      11,525      35,540      34,308

                             ----------  ----------  ----------  ----------

Gross profit                      7,449       7,089      21,498      20,387

Selling, general and

 administrative expenses          6,780       6,218      19,008      18,274

                             ----------  ----------  ----------  ----------

Income from operations              669         871       2,490       2,113

Interest expense, financing

 and other related costs,

 net                                124         255         626         766

Other investment (income)

 loss, net                           12          37         (30)       (384)

                             ----------  ----------  ----------  ----------

Income before income tax

 provision                          533         579       1,894       1,731

Provision for income taxes          201         259         810         734

                             ----------  ----------  ----------  ----------

Net income                   $      332  $      320  $    1,084  $      997

                             ==========  ==========  ==========  ==========





Net income per share

Basic                        $     0.06  $     0.06  $     0.20  $     0.19

                             ==========  ==========  ==========  ==========

Diluted                      $     0.06  $     0.06  $     0.20  $     0.18

                             ==========  ==========  ==========  ==========

Number of shares used in per

 share calculation

Basic                         5,289,000   5,277,000   5,288,000   5,270,000

Diluted                       5,477,000   5,386,000   5,485,000   5,413,000



Other Operating Data:



Number of retail stores(1)           14          13          14          13

Capital expenditures                287          57         689         271

Gross profit margin                38.2%       38.1%       37.7%       37.3%







(1) Includes thirteen Dover-branded stores and one Smith Brothers store, the Parker, CO Dover-branded store opened in Q2 2011.




                   DOVER SADDLERY, INC. AND SUBSIDIARIES

                   CONDENSED CONSOLIDATED BALANCE SHEETS

              (In thousands, except share and per share data)

                                (unaudited)

                                                      Sept. 30,   Dec. 31,

                                                        2011        2010

ASSETS

Current assets:

  Cash and cash equivalents                          $      151  $      745

  Accounts receivable                                       550         533

  Inventory                                              19,371      15,869

  Prepaid catalog costs                                   1,387         930

  Prepaid expenses and other current assets               1,103         901

  Deferred income taxes                                     110         105

                                                     ----------  ----------



Total current assets                                     22,672      19,083



Net property and equipment                                3,160       3,025



Other assets:

  Deferred income taxes                                   1,037         848

  Intangibles and other assets, net                         572         593

                                                     ----------  ----------

Total other assets                                        1,609       1,441

                                                     ----------  ----------

Total assets                                         $   27,441  $   23,549

                                                     ==========  ==========



LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

  Current portion of capital lease obligation and

   outstanding checks                                $      473  $       97

  Accounts payable                                        2,416       2,073

  Accrued expenses and other current liabilities          4,509       5,425

  Income taxes payable                                       --         414

                                                     ----------  ----------

Total current liabilities                                 7,398       8,009



Long-term liabilities:

  Revolving line of credit                                2,935          --

  Term note                                               5,500          --

  Subordinated notes payable, net                            --       5,293

  Capital lease obligation, net of current portion           30          89

  Interest rate swap derivative                             319          --

                                                     ----------  ----------

Total long-term liabilities                               8,784       5,382

Stockholders' equity:

  Common stock, par value $0.0001 per share;

   15,000,000 shares authorized; 5,291,521 and

   5,277,161 issued and outstanding as of September

   30, 2011 and December 31, 2010, respectively               1           1

Additional paid in capital                               45,596      45,391

Treasury stock, 795,865 shares at cost                   (6,082)     (6,082)

Other comprehensive loss                                   (188)         --

Accumulated deficit                                     (28,068)    (29,152)

                                                     ----------  ----------

Total stockholders' equity                               11,259      10,158

                                                     ----------  ----------

Total liabilities and stockholders' equity           $   27,441  $   23,549

                                                     ==========  ==========







Non-GAAP Financial Measures and Information

From time to time, in addition to financial results determined in accordance with generally accepted accounting principles in the United States ("GAAP"), the Company provides financial information determined by methods other than in accordance with GAAP. The Company's management uses these non-GAAP measures in its analysis of the Company's performance and ongoing operations. The Company believes that these non-GAAP operating measures supplement our GAAP financial information and provide useful information to investors for evaluating the Company's operating results and trends that may be affecting the Company's business, as they allow investors to more readily compare our operations to prior financial results and our future performance. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

When we use the term "Adjusted EBITDA," we are referring to net income minus interest income, investment income and other income plus interest expense, income taxes, non-cash stock-based compensation, depreciation, amortization and other investment loss. We present Adjusted EBITDA because we consider it an important measure of our performance and believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry.

The following table reconciles net income to Adjusted EBITDA (in thousands):




                                 Three Months Ended     Nine Months Ended

                                Sept. 30,  Sept. 30,  Sept. 30,   Sept. 30,

                                  2011       2010       2011        2010





Net income                     $      332 $      320 $    1,084  $      997

Depreciation                          188        176        554         545

Amortization of intangible

 assets                                 2          2          5           5

Stock-based compensation               62         45        186         136

Interest expense, financing

 and other related costs, net         124        255        626         766

Other investment (income)

 loss, net                             12         37        (30)       (384)

Provision for income taxes            201        259        810         734

                               ---------- ---------- ----------  ----------

Adjusted EBITDA                $      921 $    1,094 $    3,235  $    2,799

                               ========== ========== ==========  ==========







Janet Nittmann

Email Contact

Tel 978-952-8062 x218



Source: Dover Saddlery

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