JanetNittmann
jnittmann@doversaddlery.com
Tel 978-952-8062 x218
For Immediate Release
Dover Saddlery Reports Second Quarter 2009 Financial Results
LITTLETON, MA– 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 tohttp://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. |
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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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