LITTLETON, MA -- 08/09/07 --
Dover Saddlery, Inc. (NASDAQ: DOVR), the
leading multichannel retailer of equestrian products, today reported
financial results for the second quarter ended June 30, 2007.
Total revenues for the second quarter increased 12.5 % to $20.0 million,
compared to $17.8 million for the same period in 2006. Retail store
revenues increased 70 %, or $2.0 million, to $4.9 million. This increase
was primarily due to the opening of new and acquired Dover Saddlery stores.
Same store sales, reflecting continued softness in retail, decreased by 2.4
% from the second quarter of 2006. Same store sales after adjustment for
cannibalization increased 0.5 %.
Net income for the second quarter of 2007 was $376,000, compared with
$448,000 for the second quarter of 2006. Resulting earnings per diluted
share were $0.07 in the second quarter of 2007, versus earnings per diluted
share of $0.09 in the second quarter of 2006.
"The second quarter was marked by a softer than usual equestrian market.
Unseasonably cool periods in the very important Northeast and Mid-Atlantic
regions resulted in a decline in many equestrian activities and, hence the
demand for tack and apparel. In addition, Petsmart was liquidating
inventory in its Stateline Tack departments prior to exiting the equestrian
business," said Stephen L. Day, president and CEO of Dover Saddlery.
"Despite these challenging conditions, we achieved retail sales growth of
70 % and we had a very successful Grand Opening in Charlottesville,
Virginia, and this new store is performing very well."
Year-to-Date Results
For the first six months of 2007, total revenue increased 10.8 % to $38.6
million from $34.8 million for the same period in 2006. Revenues from the
retail channel increased 73 % to $8.6 million. Net loss for the first six
months of 2007 was $539,000, down from a net income of $643,000 for the
first six months of 2006. This loss is attributable to the Goldsmith Agio
Helms litigation settlement and related legal costs.
Business Outlook 2007
The Company currently expects that total 2007 revenues will range from $79
million to $83 million. Increased revenues are expected to come mainly from
the retail channel.
Conference Call and Webcast
Dover Saddlery will hold a conference call and webcast today at 5:00 p.m.
Eastern Daylight Time (EDT) to discuss its second 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. A telephone replay will be available from 8:00 p.m. August 9, until
midnight Thursday, August 16, by dialing 719/457-0820 and entering pass
code 4933202.
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
www.DoverSaddlery.com.
Notice Regarding 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 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, 2006 on file with the Securities and Exchange Commission and in
subsequent periodic reports filed with the SEC.
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
(Dollar amounts in thousands, except share data, un-audited)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2007 2006 2007 2006
Revenues, net - direct 15,086 14,893 29,960 29,856
Revenues, net - retail stores 4,912 2,888 8,597 4,958
--------- --------- --------- ---------
Revenues, net - total $ 19,998 $ 17,781 $ 38,557 $ 34,814
Cost of revenues 12,441 11,297 24,313 22,356
--------- --------- --------- ---------
Gross profit 7,557 6,484 14,244 12,458
Selling, general and
administrative expenses 6,561 5,501 13,686 10,934
Litigation settlement expense -- -- 700 --
--------- --------- --------- ---------
Income (loss) from operations 996 983 (142) 1,524
Interest expense, financing and
other related costs, net 399 223 713 432
--------- --------- --------- ---------
Income (loss) before provision
for income taxes 597 760 (855) 1,092
Provision (benefit) for income
taxes 221 312 (316) 449
--------- --------- --------- ---------
Net income (loss) $ 376 $ 448 $ (539) $ 643
========= ========= ========= =========
Net income (loss) per common
share
Basic $ 0.07 $ 0.09 $ (0.11) $ 0.13
========= ========= ========= =========
Diluted $ 0.07 $ 0.09 $ (0.11) $ 0.12
========= ========= ========= =========
Number of shares used in per
share calculations
Basic 5,074,000 5,074,000 5,074,000 5,074,000
Diluted 5,239,000 5,192,000 5,074,000 5,203,000
Other Operating Data:
Number of retail stores(1) 9 4 9 4
Capital expenditures 251 118 669 187
Gross profit margin 37.8% 36.5% 36.9% 35.8%
(1) Includes the new Dover stores in Chantilly, VA, and Lexington, VA
opened in Q1 2007, and the Charlottesville, VA store opened in Q2 2007.
DOVER SADDLERY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except share data)
June 30, December 31,
2007 2006
------------ ------------
(un-audited)
ASSETS
Current assets:
Cash and cash equivalents $ 113 $ 101
Accounts receivable 751 795
Inventory 18,455 14,811
Prepaid catalog costs 1,869 2,133
Prepaid expenses and other current assets 1,455 988
------------ ------------
Total current assets 22,643 18,828
Net capital assets 3,190 2,832
Other assets:
Deferred income taxes 460 297
Other assets, net 620 642
Goodwill 14,267 14,267
------------ ------------
Total other assets 15,347 15,206
------------ ------------
Total assets $ 41,180 $ 36,866
============ ============
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt and
short-term bank borrowings $ 2,306 $ 1,768
Accounts payable 2,933 3,508
Accrued expenses and other current
liabilities 3,630 3,355
Income taxes payable -- 282
Deferred income taxes -- 206
------------ ------------
Total current liabilities 8,869 9,119
Long-term liabilities:
Revolving line of credit, net of current
portion (1) 11,000 5,900
Subordinated notes payable 3,000 3,000
Capital lease obligation, net of current
portion 68 117
------------ ------------
Total long-term liabilities 14,068 9,017
Stockholders’ equity
Common stock, par value $0.0001 per share;
15,000,000 shares authorized; issued
5,074,344 as of June 30, 2007 and December
31, 2006 1 1
Additional paid in capital 43,939 43,887
Treasury stock, 795,865 shares at cost (6,082) (6,082)
Accumulated deficit (19,615) (19,076)
------------ ------------
Total stockholders’ equity 18,243 18,730
------------ ------------
Total liabilities and stockholders’ equity $ 41,180 $ 36,866
============ ============
(1) We have obtained waivers for non-compliance with certain covenants for
our revolver and subordinated debt as of the end of June 2007. The
Company anticipates compliance with the covenants in each of the next
four quarters. If we are not in compliance with these covenants, it
may trigger default and require the repayments of all amounts then
outstanding on our loans.
Contact:
Janet Nittmann
Email Contact
Tel 978-952-8062 x218
