Dover Saddlery Announces First Quarter 2014 Financial Results
LITTLETON, MA--(Marketwired - May 8, 2014) - Dover Saddlery, Inc. (NASDAQ: DOVR), the leading omni-channel retailer of equestrian products, today reported financial results for the first quarter ended March 31, 2014.
Total revenues for the first quarter of 2014 increased 9.4% to $19.7 million, from $18.0 million achieved in the first quarter of 2013. Revenues in the retail channel increased 21.5% to $8.8 million from $7.2 million, due primarily to the opening of new stores in 2013; while same-store sales for the first quarter of 2014 increased 3.7%.
The net loss for the first quarter of 2014 was $(543,000), or $(0.10) per diluted share, compared to $(538,000) or $(0.10) per diluted share in the first quarter of the prior year.
"I am pleased to report that the three Dover Saddlery stores opened in the fourth quarter of 2013 performed very well in the first quarter of this year. These stores have contributed towards the 22% increase in retail channel revenues," commented Stephen L. Day, president and CEO of Dover Saddlery. "The increase in selling, general and administrative expense was due primarily to increased direct marketing costs and increased labor and lease expenses associated with the new stores."
Adjusted EBITDA for the first quarter of 2014 improved to $(479,000), from $(514,000) in the first quarter of 2013. 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.
Business Outlook 2014
Dover Saddlery is planning to open four to six retail stores in 2014. Until there is greater long-term visibility on sustainable economic conditions and consumer behavior, the Company is not providing guidance on other business prospects.
Today's Teleconference and Webcast
Dover Saddlery will be hosting a conference call at 4:30 P.M. EDT today to discuss the first quarter 2014 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 web cast will be archived for a year.
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.
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 2014, the prospects for overall revenue growth, expense ratios, growth in the retail channel, 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, 2013. 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 | |||||||
March 31, | March 31, | ||||||
2014 | 2013 | ||||||
Revenues, net- direct | $ | 10,912 | $ | 10,784 | |||
Revenues, net - retail stores | 8,800 | 7,242 | |||||
Revenues, net - total | 19,712 | $ | 18,026 | ||||
Cost of revenues | 12,637 | 11,629 | |||||
Gross profit | 7,075 | 6,400 | |||||
Selling, general and administrative expenses | 8,024 | 7,265 | |||||
Loss from operations | (949 | ) | (865 | ) | |||
Interest expense, financing and other related costs, net | 142 | 124 | |||||
Other investment income (loss), net | (2 | ) | 11 | ||||
Loss before income tax benefit | (1,093 | ) | (978 | ) | |||
Benefit for income taxes | (550 | ) | (440 | ) | |||
Net loss | $ | (543 | ) | $ | (538 | ) | |
Net loss per share | |||||||
Basic | $ | (0.10 | ) | $ | (0.10 | ) | |
Diluted | $ | (0.10 | ) | $ | (0.10 | ) | |
Number of shares used in per share calculation | |||||||
Basic | 5,352,000 | 5,338,000 | |||||
Diluted | 5,352,000 | 5,338,000 | |||||
Other Operating Data: | |||||||
Number of retail stores(1) | 22 | 18 | |||||
Capital expenditures | 339 | 376 | |||||
Gross profit margin | 35.9 | % | 35.5 | % | |||
(1) | Includes twenty-one Dover-branded stores and one Smith Brothers store. |
DOVER SADDLERY, INC. AND SUBSIDIARIES | ||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||||||
(In thousands, unaudited) | ||||||||
Three Months Ended | ||||||||
March 31, | March 31, | |||||||
2014 | 2013 | |||||||
Net loss | $ | (543 | ) | $ | (538 | ) | ||
Other comprehensive loss net: | ||||||||
Change in fair value of interest rate swap contract, net of tax | 9 | 16 | ||||||
Total comprehensive loss | $ | (534 | ) | $ | (522 | ) | ||
DOVER SADDLERY, INC. AND SUBSIDIARIES | |||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
(In thousands, except share data) | |||||||||
(unaudited) | |||||||||
March 31, | Dec. 31, | ||||||||
ASSETS | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 214 | $ | 319 | |||||
Accounts receivable | 888 | 1,300 | |||||||
Inventory | 26,652 | 23,633 | |||||||
Prepaid catalog costs | 1,744 | 974 | |||||||
Prepaid expenses and other current assets | 1,971 | 1,277 | |||||||
Deferred income taxes | 369 | 355 | |||||||
Total current assets | 31,838 | 27,858 | |||||||
Net property and equipment | 5,760 | 5,763 | |||||||
Other assets: | |||||||||
Deferred income taxes | 1,346 | 1,495 | |||||||
Intangibles and other assets, net | 740 | 758 | |||||||
Total other assets | 2,086 | 2,253 | |||||||
Total assets | $ | 39,684 | $ | 35,874 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
Current liabilities: | |||||||||
Current portion of capital lease obligations and outstanding checks | $ | 347 | $ | 290 | |||||
Current portion - term note | 786 | 786 | |||||||
Current portion - Capex term loan | 711 | 630 | |||||||
Accounts payable | 1,939 | 2,352 | |||||||
Accrued expenses and other current liabilities | 5,534 | 7,201 | |||||||
Income taxes payable | - | 1,006 | |||||||
Total current liabilities | 9,317 | 12,265 | |||||||
Long-term liabilities: | |||||||||
Revolving line of credit | 7,673 | 95 | |||||||
Capex term loan, net of current portion | 2,620 | 2,818 | |||||||
Term note, net of current portion | 3,928 | 4,125 | |||||||
Capital lease obligation, net of current portion | 86 | 96 | |||||||
Interest rate swap contract | 173 | 189 | |||||||
Total long-term liabilities | 14,480 | 7,323 | |||||||
Stockholders' equity: | |||||||||
Common stock, par value $0.0001 per share; 15,000,000 shares authorized; 6,160,103 and 6,147,263 issued and 5,364,238 and 5,351,398 outstanding as of March 31, 2014 and December 31, 2013, respectively | 1 | 1 | |||||||
Additional paid in capital | 46,439 | 46,304 | |||||||
Treasury stock, 795,865 shares at cost | (6,082 | ) | (6,082 | ) | |||||
Other comprehensive loss | (113 | ) | (122 | ) | |||||
Accumulated deficit | (24,358 | ) | (23,815 | ) | |||||
Total stockholders' equity | 15,887 | 16,285 | |||||||
Total liabilities and stockholders' equity | $ | 39,684 | $ | 35,874 | |||||
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 loss to Adjusted EBITDA (in thousands):
Three Months Ended | |||||||
March 31, | March 31, | ||||||
2014 | 2013 | ||||||
Net loss | $ | (543 | ) | $ | (538 | ) | |
Depreciation | 342 | 263 | |||||
Amortization of intangible assets | 18 | 18 | |||||
Stock-based compensation | 110 | 70 | |||||
Interest expense, financing and other related costs, net | 142 | 124 | |||||
Other investment (income) loss, net | 2 | (11 | ) | ||||
Benefit for income taxes | (550 | ) | (440 | ) | |||
Adjusted EBITDA | $ | (479 | ) | $ | (514 | ) | |
