SOURCE: Dover Saddlery

Dover Saddlery

May 15, 2015 16:00 ET

Dover Saddlery Announces First Quarter 2015 Financial Results

LITTLETON, MA--(Marketwired - May 15, 2015) -  Dover Saddlery, Inc. (NASDAQ: DOVR), the leading omni-channel retailer of equestrian products, today reported financial results for the first quarter ended March 31, 2015.

Total revenues for the first quarter of 2015 increased 16.0% to $22.8 million, from $19.7 million achieved in the first quarter of 2014. Revenues in the retail channel increased 27.4% to $11.2 million from $8.8 million, due primarily to the opening of new stores in 2014; while same-store sales for the first quarter of 2015 increased 3.0%.

The net loss for the first quarter of 2015 was $(776,000), or $(0.14) per diluted share, compared to $(543,000) or $(0.10) per diluted share in the first quarter of the prior year.

"I am pleased to report that the Dover Saddlery stores opened in 2014 performed very well in the first quarter of this year," commented Stephen L. Day, president and CEO of Dover Saddlery. "Our store in Wellington, Florida has had a very strong first winter season and is now well-established as our flagship store in the South. During the first quarter, we opened two additional Dover Saddlery retail stores -- the first in Latham, NY and the second in Pittsburgh, PA. Both locations had very strong Grand Opening weekends with customers travelling long distances to experience and shop a Dover Saddlery store. During the quarter there was an increase in selling, general and administrative expenses, due primarily to increased marketing costs and increased labor and lease expenses associated with the two new stores that we opened during this period."

Adjusted EBITDA for the first quarter of 2015 was $(652,000), compared to $(479,000) in the first quarter of 2014. A reconciliation of the net income calculated in accordance with GAAP and the non-GAAP Adjusted EBITDA measure is provided in the table accompanying this press release.

Business Outlook 2015

Dover Saddlery is planning to open a total of five to seven retail stores in 2015. 

Today's Teleconference and Webcast

Dover Saddlery will be hosting a conference call at 4:30 P.M. EDT today to discuss the first quarter 2015 results. Investors are invited to listen to the earnings conference call over the Internet through the company's website at, this web cast will be archived for a year.

About Dover Saddlery, Inc.

Dover Saddlery, Inc. (NASDAQ: DOVR) is the leading multichannel 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

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 fiscal 2015, the prospects for overall revenue growth, expense ratios, growth in the retail channel, profitability, and the opening of new stores. 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 Saddlery's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2014. 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.

(In thousands, except share and per share data)  
    Three Months Ended  
    March 31,     March 31,  
    2015     2014  
Revenues, net - direct   $ 11,648     $ 10,912  
Revenues, net - retail stores     11,207       8,800  
Revenues, net - total     22,855       19,712  
Cost of revenues     14,419       12,637  
Gross profit     8,436       7,075  
Selling, general and administrative expenses     9,628       8,024  
Loss from operations     (1,192 )     (949 )
Interest expense, financing and other related costs, net     179       142  
Other investment income (loss), net     23       (2 )
Loss before income tax benefit     (1,348 )     (1,093 )
Benefit for income taxes     (572 )     (550 )
Net loss   $ (776 )   $ (543 )
Net loss per share                
Basic   $ (0.14 )   $ (0.10 )
Diluted   $ (0.14 )   $ (0.10 )
Number of shares used in per share calculation                
Basic     5,409,000       5,352,000  
Diluted     5,409,000       5,352,000  
Other Operating Data:                
Number of retail stores(1)     27       22  
Capital expenditures     775       339  
Gross profit margin     36.9 %     35.9 %
(1) Includes twenty-six Dover-branded stores and one Smith Brothers store.  
(In thousands, unaudited)  
    Three Months Ended  
    March 31,     March 31,  
    2015     2014  
Net loss   $ (776 )   $ (543 )
Other comprehensive loss net:                
  Change in fair value of interest rate swap contract, net of tax     1       9  
Total comprehensive loss   $ (775 )   $ (534 )
(In thousands, except share data)  
    March 31,
    Dec. 31,
Current assets:                
  Cash and cash equivalents   $ 452     $ 315  
  Accounts receivable     1,314       1,644  
  Inventory     32,357       28,260  
  Prepaid catalog costs     706       1,267  
  Prepaid expenses and other current assets     2,715       1,943  
  Deferred income taxes     520       347  
Total current assets     38,064       33,776  
Net property and equipment     7,372       7,019  
Other assets:                
  Deferred income taxes     1,551       1,772  
  Goodwill     1,244       -  
  Intangibles and other assets, net     727       717  
Total other assets     3,522       2,489  
Total assets   $ 48,958     $ 43,284  
Current liabilities:                
  Current portion of capital lease obligations and outstanding checks   $ 922     $ 1,522  
  Current portion - term notes     786       786  
  Current portion - Capex term loan     1,056       792  
  Accounts payable     3,259       2,577  
  Accrued expenses and other current liabilities     6,463       7,432  
  Income taxes payable     -       551  
Total current liabilities     12,486       13,660  
Long-term liabilities:                
  Revolving line of credit     10,573       3,992  
  Capex term loan, net of current portion     3,544       4,006  
  Term notes, net of current portion     3,143       3,339  
  Promissory Notes     1,600       -  
  Capital lease obligation, net of current portion     50       57  
  Interest rate swap contract     126       128  
Total long-term liabilities     19,036       11,522  
Stockholders' equity:                
  Common stock, par value $0.0001 per share; 15,000,000 shares authorized; 6,205,357 issued and 5,409,492 outstanding as of March 31, 2015 and December 31, 2014     1       1  
Additional paid in capital     46,965       46,856  
Treasury stock, 795,865 shares at cost     (6,082 )     (6,082 )
Other comprehensive loss     (88 )     (89 )
Accumulated deficit     (23,360 )     (22,584 )
Total stockholders' equity     17,436       18,102  
Total liabilities and stockholders' equity   $ 48,958     $ 43,284  

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 the Company ties its executive and employee bonus pools directly to this measure. We also 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  
    March 31,     March 31,  
    2015     2014  
Net loss   $ (776 )   $ (543 )
Depreciation     422       342  
Amortization of intangible assets     9       18  
Stock-based compensation     109       110  
Interest expense, financing and other related costs, net     179       142  
Other investment (income) loss, net     (23 )     2  
Benefit for income taxes     (572 )     (550 )
Adjusted EBITDA   $ (652 )   $ (479 )

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