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Dover Saddlery Announces Fourth Quarter and Full Year 2012 Financial Results

Mar 26 2013 12:00AM

Marketwire

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LITTLETON, MA -- (Marketwire) -- 03/26/13 -- Dover Saddlery, Inc. (NASDAQ: DOVR), the leading multichannel retailer of equestrian products, today announced financial results for the fourth quarter and fiscal year ended December 31, 2012.

Fourth quarter results

Total revenues for the fourth quarter of 2012 increased 11.0% to $26.4 million over the same period in the prior year: retail store revenues increased 16.7% to $10.5 million, and direct revenues increased 7.6% to $15.9 million. Same-store sales increased 2.4% in the quarter.

Net income for the quarter increased 39.6% to $895,000, or $0.16 per diluted share, from $641,000 or $0.12 achieved in the corresponding quarter of the prior year. Stephen L. Day, President and Chief Executive Officer, stated, "Our excellent holiday performance is a reflection of the strength of the Dover Saddlery brand as the source for the best selection and service during the all-important gift purchasing season."

Full Year Results

Total revenues for the fiscal year 2012 increased 6.5% to $86.0 million from $80.8 million achieved during 2011. As a result of the opening of new stores and same-store sales increasing 6.0%, retail store revenues increased 19.9% to $36.5 million. The company opened three Dover Saddlery retail stores during 2012, in Warrington, PA, Medina MN and Raleigh, NC, bringing the total number of retail stores to eighteen. Direct revenues for the fiscal year 2012, decreased 1.7% to $49.5 million, mainly due to consumer uncertainty that led to soft sales in the second and third quarters.

Net income for fiscal 2012 was $1,589,000, or $0.29 per diluted share, compared to $1,724,000 or $0.31 per diluted share achieved in the fiscal year 2011. Adjusted EBITDA for the fiscal year 2012 was $4.6 million, compared to $4.8 million achieved in 2011. 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 4:30 P.M. ET today to discuss the fourth quarter and full year 2012 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 2013, the prospects for overall revenue growth, profitability, consumer sentiment 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 Saddler's Annual Report on Form 10-K for the fiscal year ended December 31, 2011. 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 INCOME (In thousands, except share and per share data) (Unaudited) Three Months Ended Twelve Months Ended Dec. 31, Dec. 31, Dec. 31, Dec. 31, 2012 2011 2012 2011Revenues, net- direct $ 15,891 $ 14,773 $ 49,475 $ 50,334Revenues, net - retail stores 10,529 9,020 36,573 30,497 ---------- ---------- ---------- ----------Revenues, net - total 26,420 23,793 86,048 80,831Cost of revenues 16,127 14,295 53,350 49,836 ---------- ---------- ---------- ----------Gross profit 10,293 9,498 32,698 30,995Selling, general and administrative expenses 8,589 8,212 29,255 27,219 ---------- ---------- ---------- ----------Income from operations 1,704 1,286 3,443 3,776Interest expense, financing and other related costs, net 148 127 538 728Other investment loss, net 55 22 39 18 ---------- ---------- ---------- ----------Income before income tax provision 1,501 1,137 2,866 3,030Provision for income taxes 606 496 1,277 1,306 ---------- ---------- ---------- ----------Net income $ 895 $ 641 $ 1,589 $ 1,724 ========== ========== ========== ==========Net income per shareBasic $ 0.17 $ 0.12 $ 0.30 $ 0.33 ========== ========== ========== ==========Diluted $ 0.16 $ 0.12 $ 0.29 $ 0.31 ========== ========== ========== ==========Number of shares used in per share calculationBasic 5,336,000 5,307,000 5,334,000 5,293,000Diluted 5,476,000 5,461,000 5,509,000 5,482,000Other Operating Data:Number of retail stores(1) 18 15 18 15Capital expenditures 523 700 2,184 1,384Gross profit margin 39.0% 39.9% 38.0% 38.3%(1) Includes seventeen Dover-branded stores and one Smith Brothers store; one additional Dover-branded store opened in Raleigh, NC in Q4 2012. DOVER SADDLERY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands, unaudited) Three Months Ended Twelve Months Ended Dec. 31, Dec. 31, Dec. 31, Dec. 31, 2012 2011 2012 2011Net income $ 895 $ 641 $ 1,589 $ 1,724 ----------- ---------- ----------- ----------Other comprehensive loss: Change in fair value of interest rate swap contract, net of tax 13 (2) 1 (190) ----------- ---------- ----------- ----------Total comprehensive income $ 908 $ 639 $ 1,590 $ 1,534 =========== ========== =========== ========== DOVER SADDLERY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, unaudited) Dec. 31, Dec. 31, 2012 2011ASSETSCurrent assets: Cash and cash equivalents $ 299 $ 313 Accounts receivable 1,778 811 Inventory 19,915 19,383 Prepaid catalog costs 784 1,273 Prepaid expenses and other current assets 1,116 896 Deferred income taxes 595 261 ---------- ----------Total current assets 24,487 22,937Net property and equipment 5,034 3,667Other assets: Deferred income taxes 1,196 1,018 Intangibles and other assets, net 784 571 ---------- ----------Total other assets 1,980 1,589 ---------- ----------Total assets $ 31,501 $ 28,193 ========== ==========LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities: Current portion of capital lease obligations and outstanding checks $ 337 $ 1,100 Current Portion - Term Note 589 - Accounts payable 1,837 2,201 Accrued expenses and other current liabilities 7,146 5,741 Income taxes payable 860 308 ---------- ----------Total current liabilities 10,769 9,350Long-term liabilities: Revolving line of credit 1,515 987 Term note 4,911 5,500 Capital lease obligation, net of current portion 121 16 Interest rate swap contract 320 322 ---------- ----------Total long-term liabilities 6,867 6,825Stockholders' equity: Common stock, par value $0.0001 per share; 15,000,000 shares authorized; 6,133,343 and 6,128,603 issued and 5,337,478 and 5,332,738 outstanding as of December 31, 2012 and 2011, respectively 1 1 Additional paid in capital 45,973 45,716 Treasury stock, 795,865 shares at cost (6,082) (6,082) Other comprehensive loss (189) (190) Accumulated deficit (25,838) (27,427) ---------- ---------- Total stockholders' equity 13,865 12,018 ---------- ---------- Total liabilities and stockholders' equity $ 31,501 $ 28,193 ========== ==========




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 Twelve Months Ended Dec. 31, Dec. 31, Dec. 31, Dec. 31, 2012 2011 2012 2011Net income $ 895* $ 641 $ 1,589** $ 1,724Depreciation 249 193 873 747Amortization of intangible assets 20 - 57 5Stock-based compensation 65 56 251 242Interest expense, financing and other related costs, net 148 127 538 728Other investment loss, net 55 22 39 18Provision for income taxes 606 496 1,277 1,306 ----------- ----------- ----------- -----------Adjusted EBITDA $ 2,038* $ 1,535 $ 4,624** $ 4,770 =========== =========== =========== ===========(*) Includes gift card breakage income of $43,088 for the three months ended December 31, 2012. There was no breakage recorded for the same period in 2011.(**) Includes the cumulative impact of the change in gift card breakage income of $684,007 recorded in the first quarter of 2012 and current year breakage income for the twelve months ended December 31, 2012 of $172,350. There was no breakage recorded for the same period in 2011.





Janet Nittmann
Email Contact
Tel 978 952 8062 x218





Source: Marketwire


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