SOURCE: Dover Saddlery

Dover Saddlery

March 29, 2011 08:00 ET

Dover Saddlery Announces Strong Financial Results for Fourth Quarter and Full Year 2010

LITTLETON, MA--(Marketwire - March 29, 2011) - Dover Saddlery, Inc. (NASDAQ: DOVR), the leading multi-channel retailer of equestrian products, today announced financial results for the fourth quarter and fiscal year ended December 31, 2010.

Fourth quarter results

Total revenues for the fourth quarter of 2010 increased 6.1% to $23.5 million compared to $22.1 million achieved in the fourth quarter of 2009. Retail store revenues rose 11.2% to $7.6 million driven by a same-store sales increase of 11.0%. Net income for the 2010 quarter increased 18.8% to $1.0 million or $0.19 per diluted share compared to a net income of $0.9 million or $0.17 per diluted share achieved in the fourth quarter of 2009.

Full Year Results

Total revenues for the fiscal year 2010 increased 2.6% to $78.2 million from $76.2 million achieved in 2009. Retail store channel revenues increased 4.8% to $26.0 million; same-store sales increased 2.9% while sales in the direct channel increased 1.6% to $52.1 million.

Net income for fiscal 2010 increased 126% to $2.0 million from $0.9 million achieved for fiscal year 2009. This improvement in net income was due to increased revenue and gross profit; cost savings in selling, general and administrative expenses; and non-recurring investment income. Resulting earnings increased to $0.38 per diluted share for the fiscal year 2010 compared to $0.17 per diluted share achieved in 2009.

"Our financial performance for the fourth quarter and full year 2010 was extremely strong and is a testament to our cost controlling strategies and to the strength of our brand," commented Stephen L. Day, president and CEO of Dover Saddlery. "We have improved margins and generated cash, and we are now well-positioned to accelerate our retail store rollout, expand market share and enhance shareholder value."

Adjusted EBITDA for the fiscal year 2010 increased 25.3% to $5.1 million from $4.1 million achieved in 2009. 

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.

Today's Teleconference and Webcast

Dover Saddlery will be hosting a conference call at 8:30 A.M. ET today to discuss the fourth quarter and full year 2010 results. Investors are invited to listen to the earnings conference call over the Internet through the company's website at http://investor.shareholder.com/DOVR/. This webcast will be archived for a year.

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 2011, the prospects for overall revenue growth and 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 for the fiscal year ended December 31, 2009. 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     Twelve Months Ended  
    Dec. 31,     Dec. 31,     Dec. 31,     Dec. 31,  
    2010     2009     2010     2009  
                                 
Revenues, net - direct   $ 15,884     $ 15,303     $ 52,140     $ 51,345  
Revenues, net - retail stores     7,611       6,844       26,050       24,859  
Revenues, net - total   $ 23,495     $ 22,147     $ 78,190     $ 76,204  
Cost of revenues     14,183       12,843       48,491       47,351  
Gross profit     9,312       9,304       29,699       28,853  
Selling, general and administrative expenses     7,208       7,332       25,483       25,702  
Income from operations     2,104       1,972       4,216       3,151  
Interest expense, financing and other related costs, net     266       315       1,030       1,310  
Other investment (income) loss     69       43       (314 )     44  
Income before income tax provision     1,769       1,614       3,500       1,797  
Provision for income taxes     721       732       1,455       893  
Net income   $ 1,048     $ 882     $ 2,045     $ 904  
                                 
                                 
Net income per share                                
Basic   $ 0.20     $ 0.17     $ 0.39     $ 0.17  
Diluted   $ 0.19     $ 0.17     $ 0.38     $ 0.17  
Number of shares used in per share calculation                                
Basic     5,277,000       5,200,000       5,272,000       5,190,000  
Diluted     5,403,000       5,284,000       5,399,000       5,248,000  
                                 
Other Operating Data:                                
                                 
Number of retail stores(1)     13       13       13       13  
Capital expenditures     35       149       306       426  
Gross profit margin     39.7 %     42.0 %     38.0 %     37.9 %
 
 (1) Includes twelve Dover-branded stores and one Smith Brothers store.
 
   
   
DOVER SADDLERY, INC. AND SUBSIDIARIES  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(In thousands, except share and per share data)  
(unaudited)  
  Dec. 31,
2010
    Dec. 31,
2009
 
ASSETS              
Current assets:              
  Cash and cash equivalents $ 745     $ 732  
  Accounts receivable   533       827  
  Inventory   15,869       15,301  
  Prepaid catalog costs   930       1,164  
  Prepaid expenses and other current assets   901       780  
  Deferred income taxes   105       --  
               
Total current assets   19,083       18,804  
               
Net property and equipment   3,025       3,365  
               
Other assets:              
  Deferred income taxes   848       709  
  Intangibles and other assets, net   593       684  
Total other assets   1,441       1,393  
Total assets $ 23,549     $ 23,562  
               
LIABILITIES AND STOCKHOLDERS' EQUITY              
Current liabilities:              
  Current portion of capital lease obligation and outstanding checks $ 97     $ 676  
  Accounts payable   2,073       2,305  
  Accrued expenses and other current liabilities   5,425       4,083  
  Income taxes payable   414       350  
  Deferred income taxes   --       22  
Total current liabilities   8,009       7,436  
               
Long-term liabilities:              
  Revolving line of credit   --       3,000  
  Subordinated notes payable, net   5,293       5,091  
  Capital lease obligation, net of current portion   89       132  
Total long-term liabilities   5,382       8,223  
               
Stockholders' equity:              
Common stock, par value $0.0001 per share; 15,000,000 shares authorized; issued 5,277,161 as of December 31, 2010 and 5,263,975 as of December 31, 2009, respectively   1       1  
Additional paid in capital   45,391       45,181  
Treasury stock, 795,865 shares at cost   (6,082 )     (6,082 )
Accumulated deficit   (29,152 )     (31,197 )
Total stockholders' equity   10,158       7,903  
Total liabilities and stockholders' equity $ 23,549     $ 23,562  

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   Twelve Months Ended
  Dec. 31,
2010
  Dec. 31,
2009
  Dec. 31,
2010
    Dec. 31,
2009
 
                         
Net income $ 1,048   $ 882   $ 2,045     $ 904
Depreciation   185     187     731       769
Amortization of intangible assets   2     2     6       6
Stock-based compensation   54     44     190       179
Interest expense, financing and other related costs, net   266     315     1,030       1,310
Other investment (income) loss   69     43     (314 )     44
Provision for income taxes   721     732     1,455       893
Adjusted EBITDA $ 2,345   $ 2,205   $ 5,143     $ 4,105
                         

Contact Information