SOURCE: Dover Saddlery

Dover Saddlery

August 12, 2009 08:00 ET

Dover Saddlery Reports Second Quarter 2009 Financial Results

LITTLETON, MA--(Marketwire - August 12, 2009) - Dover Saddlery, Inc. (NASDAQ: DOVR), the leading multichannel retailer of equestrian products, today reported financial results for the second quarter ended June 30, 2009.

Second Quarter Results

"We are pleased with the improvement in our financial performance in the second quarter," said Stephen L. Day, president and CEO of Dover Saddlery. "Our stringent cost reduction initiatives have led to a very positive increase in net income and earnings per share. Market conditions continue to be challenging; however, we are seeing some signs of improvement, and as we see further signs, we will increase our marketing spend in order to stimulate growth."

Total revenues for the second quarter were $19.1 million, a 4.2% decrease compared to revenues of $19.9 million for the second quarter of 2008. Retail store channel revenues increased 13.7% to $6.7 million, primarily as a result of our retail store expansion. Direct channel revenues decreased 11.6%, which was attributable to soft consumer demand. Same-store-sales, while improving from the first quarter, declined 1.6% compared to the second quarter of 2008.

Net income for the second quarter increased 36% to $340,000 as compared to $250,000 for the prior year. Resulting earnings per diluted share increased to $0.06, versus earnings per diluted share of $0.05 in the corresponding period of 2008.

Year-to-Date Results

For the first six months of 2009, total revenues were $35.5 million, a decrease of 5.5% from $37.6 million for the same period in 2008. Revenues from the retail channel increased 13.2% to $11.3 million, while direct channel revenues were down 12.3%. Net loss for the first six months of 2009 increased to $(250,000) compared to $(109,000) for the prior period. The resulting loss per share was $(0.05) compared to $(0.02) in the first half of 2008.

Business Outlook 2009

Until there is greater long-term visibility on economic conditions and consumer behavior, the Company is not providing guidance on business prospects in 2009.

Conference Call and Webcast

Dover Saddlery will hold a conference call and webcast on Wednesday, August 12th at 8:30 a.m. ET to discuss its first 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.

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 2009, the prospects for overall revenue growth and the opening of and revenue growth from 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, 2008.

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      Six Months Ended

                             June 30,    June 30,    June 30,    June 30,
                               2009        2008        2009        2008

Revenues, net - direct      $   12,456  $   14,087  $   24,178  $   27,583
Revenues, net - retail
 stores                          6,654       5,854      11,333      10,012
                            ----------  ----------  ----------  ----------
Revenues, net - total       $   19,110  $   19,941  $   35,511  $   37,595
Cost of revenues                12,049      12,967      22,764      24,266
                            ----------  ----------  ----------  ----------
Gross profit                     7,061       6,974      12,747      13,329
Selling, general and
 administrative expenses         5,934       6,284      12,500      12,870
                            ----------  ----------  ----------  ----------
Income from operations           1,127         690         247         459
Interest expense, financing
 and other related costs,
 net                               338         315         650         648
Other investment income,
 net                               (26)         (2)        (19)         (2)
                            ----------  ----------  ----------  ----------
Income (loss) before income
 tax provision (benefit)           815         377        (384)       (187)
Provision (benefit) for
 income taxes                      475         127        (134)        (78)
                            ----------  ----------  ----------  ----------
Net income (loss)           $      340  $      250  $     (250) $     (109)
                            ==========  ==========  ==========  ==========


Net income (loss) per share
Basic                       $     0.07  $     0.05  $    (0.05) $    (0.02)
                            ==========  ==========  ==========  ==========
Diluted                     $     0.06  $     0.05  $    (0.05) $    (0.02)
                            ==========  ==========  ==========  ==========
Number of shares used in
 per share calculation
Basic                        5,187,000   5,177,000   5,187,000   5,141,000
Diluted                      5,259,000   5,290,000   5,187,000   5,141,000

Other Operating Data:

Number of retail stores (1)         13          11          13          11
Capital expenditures                41         267         281         497
Gross profit margin               37.0%       35.0%       35.9%       35.5%

(1) Includes twelve Dover-branded stores and one Smith Brothers store;
    the June 30, 2009 store count includes the Alpharetta, GA
    Dover-branded store opened in Q4 2008, and the North Kingstown, RI
    Dover-branded store opened in Q1 2009.





                    DOVER SADDLERY, INC. AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED BALANCE SHEETS
               (In thousands, except share and per share data)


                                                  June 30,    December 31,
                                                    2009          2008
                                                ------------  ------------

ASSETS
Current assets:
  Cash and cash equivalents                     $        356  $        448
  Accounts receivable                                    604           833
  Inventory                                           17,196        17,330
  Prepaid catalog costs                                1,288         1,673
  Prepaid expenses and other current assets            1,272           997
                                                ------------  ------------
Total current assets                                  20,716        21,281

Net property and equipment                             3,480         3,599

Other assets:
  Deferred income taxes                                  593           583
  Intangibles and other assets, net                      992           989
                                                ------------  ------------
Total other assets                                     1,585         1,572
                                                ------------  ------------
Total assets                                    $     25,781  $     26,452
                                                ============  ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Current portion of capital lease obligation
   and outstanding checks                       $        698  $        480
  Accounts payable                                     1,231         2,168
  Accrued expenses and other current
   liabilities                                         3,269         3,640
  Deferred income taxes                                  258           212
                                                ------------  ------------
Total current liabilities                              5,456         6,500

Long-term liabilities:
  Revolving line of credit                             8,800         8,300
  Subordinated notes payable, net                      4,984         4,907
  Capital lease obligation, net of current
   portion                                                81           125
                                                ------------  ------------
Total long-term liabilities                           13,865        13,332
Stockholders' equity:

  Common stock, par value $0.0001 per share;
   15,000,000 shares authorized; issued
   5,187,038 as of June 30, 2009 and
   December 31, 2008                                       1             1
Additional paid in capital                            44,891        44,801
Treasury stock, 795,865 shares at cost                (6,082)       (6,082)
Accumulated deficit                                  (32,350)      (32,100)
                                                ------------  ------------
Total stockholders' equity                             6,460         6,620
                                                ------------  ------------
Total liabilities and stockholders' equity      $     25,781  $     26,452
                                                ============  ============

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