UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): | November 12, 2013 |
Dover Saddlery, Inc.
__________________________________________
(Exact name of registrant as specified in its charter)
Delaware | 000-51624 | 04-3438294 |
_____________________ (State or other jurisdiction |
_____________ (Commission |
______________ (I.R.S. Employer |
of incorporation) | File Number) | Identification No.) |
525 Great Road, P.O. Box 1100, Littleton, Massachusetts | 01460 | |
_________________________________ (Address of principal executive offices) |
___________ (Zip Code) |
Registrants telephone number, including area code: | 978-952-8062 |
Not Applicable
______________________________________________
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On November 12, 2013, Dover Saddlery, Inc. (the "registrant") issued a press release reporting on its results of operations for the third quarter ended September 30, 2013. A copy of that press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.
The press release includes references to Adjusted EBITDA, a non-GAAP financial measure that management uses in its analysis of the registrant’s performance and ongoing operations. Reconciliations to the most directly comparable GAAP measures are included in the financial statements portion of the press release. The registrant presents Adjusted EBITDA because registrant considers it an important measure of its performance, and believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in registrant's industry.
Item 7.01 Regulation FD Disclosure.
On November 12, 2013, Dover Saddlery, Inc. (the "registrant") issued a press release reporting on its results of operations for the third quarter ended September 30, 2013. A copy of that press release is attached hereto as Exhibit 99.1 and incorporated by reference herein
The press release includes references to Adjusted EBITDA, a non-GAAP financial measure that management uses in its analysis of the registrant’s performance and ongoing operations. Reconciliations to the most directly comparable GAAP measures are included in the financial statements portion of the press release. The registrant presents Adjusted EBITDA because registrant considers it an important measure of its performance, and believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in registrant's industry.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
99.1 November 12, 2013 Press Release
The information and exhibits submitted in this Report are and shall be deemed to furnished to the Securities and Exchange Commission, and shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
The press release attached as Exhbit 99.1 to this Report 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 the balance of fiscal 2013 and beyond, overall revenue growth, customer sentiment and behavior, sales in the direct channel, retail-store and same-store sales growth, 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 the registrant 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. Actual results could differ materially based upon a number of factors including those identified in the press release.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dover Saddlery, Inc. | ||||
November 12, 2013 | By: |
/s/ David R. Pearce
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Name: David R. Pearce | ||||
Title: Chief Financial Officer |
Exhibit Index
Exhibit No. | Description | |
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99.1
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November 12, 2013 Press Release |
Janet Nittmann
jnittmann@doversaddlery.com
Tel 978-952-8062 x218
For Immediate Release
Dover Saddlery Reports Third Quarter 2013 Financial Results
LITTLETON, MA November 12, 2013 Dover Saddlery, Inc. (NASDAQ:DOVR), the leading multi-channel retailer of equestrian products, today reported financial results for the third quarter ended September 30, 2013.
Total revenues for the third quarter of 2013 increased 10.5%, or $2.1 million, to $22.6 million from $20.5 million achieved in the third quarter of 2012. Retail store channel revenues increased 15.6%, or $1.5 million, to $11.4 million and same-store sales increased 4.2% over the third quarter of 2012. Net income for the third quarter increased 154.6%, or $269,000, to $443,000 from $174,000. Earnings per share increased $0.05 to $0.08 from $0.03 per fully diluted share in the third quarter of 2012.
Year-to-Date Results
For the first nine months of 2013, total revenues increased 6.4% to $63.6 million, from $59.7 million achieved in the corresponding period in 2012. Retail store channel revenues increased 15.7% to $30.4 million and same-store sales increased 1.9% year to date. Net income decreased to $260,000, or $0.05 per fully diluted share, from $716,000, or $0.13 per fully diluted share.
Our retail stores performed extremely well in the third quarter and same-store sales recovered nicely from the first quarter, and continue to increase. For the ten-week period ending October 27, same store sales are up 10% over the same period last year, said Stephen L. Day, President and CEO of Dover Saddlery. Our recent new store opening in Winter Park, Florida exceeded expectations with well over five hundred guests attending the VIP private reception and shopping event.
Business Outlook 2013
Dover Saddlery has opened two stores since the close of the third quarter, and is planning to open one store in December of 2013, which will bring the total number of retail stores to twenty two. Until there is greater long-term visibility on sustainable economic conditions and consumer behavior, the Company is not providing guidance on other business prospects.
Todays Teleconference and Webcast
Dover Saddlery executives will host a conference call at 4:30 pm ET today, to discuss the results. Interested parties may access the call by dialing +1-877-712-7037 or may listen to the call live via webcast. To access the webcast please go to http://investor.shareholder.com/DOVR/events.cfm and click on the webcast icon.
About Dover Saddlery, Inc. Dover Saddlery, Inc. (NASDAQ:DOVR News) is the leading multi-channel 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 Companys business outlook for the
balance of fiscal 2013 and beyond, overall revenue growth, customer sentiment and behavior, sales
in the direct channel, retail-store and same-store sales growth, and the opening of new stores. All
statements other than statements of historical fact included in this press release regarding the
Companys 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 Saddlers Annual Report on Form 10-K for the fiscal year ended
December 31, 2012. 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 | Nine Months Ended | |||||||||||||||
Sept. 30, | Sept. 30 | Sept. 30 | Sept 30 | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Revenues, net- direct |
$ | 11,180 | $ | 10,567 | $ | 33,175 | $ | 33,472 | ||||||||
Revenues, net retail stores |
11,435 | 9,895 | 30,409 | 26,276 | ||||||||||||
Revenues, net total |
$ | 22,615 | $ | 20,462 | $ | 63,584 | $ | 59,748 | ||||||||
Cost of revenues |
14,044 | 12,842 | 39,976 | 37,224 | ||||||||||||
Gross profit |
8,571 | 7,620 | 23,608 | 22,524 | ||||||||||||
Selling, general and administrative expenses |
7,640 | 7,011 | 22,715 | 20,665 | ||||||||||||
Income from operations |
931 | 609 | 893 | 1,859 | ||||||||||||
Interest expense, financing and other related costs, net |
154 | 128 | 426 | 390 | ||||||||||||
Other investment (income) loss, net |
4 | 15 | (33 | ) | (16 | ) | ||||||||||
Income before income tax provision |
773 | 466 | 500 | 1,485 | ||||||||||||
Provision for income taxes |
330 | 292 | 240 | 769 | ||||||||||||
Net income |
$ | 443 | $ | 174 | $ | 260 | $ | 716 | ||||||||
Net income per share |
||||||||||||||||
Basic |
$ | 0.08 | $ | 0.03 | $ | 0.05 | $ | 0.13 | ||||||||
Diluted |
$ | 0.08 | $ | 0.03 | $ | 0.05 | $ | 0.13 | ||||||||
Number of shares used in per share calculation |
||||||||||||||||
Basic |
5,345,000 | 5,333,000 | 5,340,000 | 5,333,000 | ||||||||||||
Diluted |
5,534,000 | 5,524,000 | 5,524,000 | 5,560,000 | ||||||||||||
Other Operating Data: |
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Number of retail stores(1) |
19 | 17 | 19 | 17 | ||||||||||||
Capital expenditures |
567 | 716 | 1,312 | 1,837 | ||||||||||||
Gross profit margin |
37.9 | % | 37.2 | % | 37.1 | % | 37.7 | % |
(1) | Includes eighteen Dover-branded stores and one Smith Brothers store. |
DOVER SADDLERY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands, unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
Sept. 30, | Sept. 30, | Sept. 30, | Sept. 30 | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Net income
|
$ | 443 | $ | 174 | $ | 260 | $ | 716 | ||||||||
Other comprehensive loss:
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||||||||||||||||
Change in fair value of interest rate swap contract, net of tax |
4 |
(2) |
53 |
(12) |
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Total comprehensive income
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$ | 447 | $ | 172 | $ | 313 | $ | 704 | ||||||||
DOVER SADDLERY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
(Unaudited)
Sept. 30, | Dec. 31, | |||||||
2013 | 2012 | |||||||
ASSETS |
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Current assets: |
||||||||
Cash and cash equivalents |
$ | 230 | $ | 299 | ||||
Accounts receivable |
988 | 1,778 | ||||||
Inventory |
24,322 | 19,915 | ||||||
Prepaid catalog costs |
971 | 784 | ||||||
Prepaid expenses and other current assets |
1,131 | 1,116 | ||||||
Deferred income taxes |
246 | 300 | ||||||
Total current assets |
27,888 | 24,192 | ||||||
Net property and equipment |
5,503 | 5,034 | ||||||
Other assets: |
||||||||
Deferred income taxes |
1,282 | 1,201 | ||||||
Intangibles and other assets, net |
826 | 784 | ||||||
Total other assets |
2,108 | 1,985 | ||||||
Total assets |
$ | 35,499 | $ | 31,211 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
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Current liabilities: |
||||||||
Current portion of capital lease obligations
and outstanding checks |
$ | 1,355 | $ | 337 | ||||
Current portion Term notes |
786 | 589 | ||||||
Current portion Capex term loan |
468 | | ||||||
Accounts payable |
2,733 | 1,837 | ||||||
Accrued expenses and other current liabilities |
4,986 | 6,348 | ||||||
Income taxes payable |
76 | 936 | ||||||
Total current liabilities |
10,404 | 10,047 | ||||||
Long-term liabilities: |
||||||||
Revolving line of credit |
3,997 | 1,515 | ||||||
Capex term loan, net of current portion |
1,638 | | ||||||
Term notes, net of current portion |
4,321 | 4,911 | ||||||
Capital lease obligation, net of current portion |
77 | 121 | ||||||
Interest rate swap contract |
216 | 320 | ||||||
Total long-term liabilities |
10,249 | 6,867 | ||||||
Stockholders equity: |
||||||||
Common stock, par value $0.0001 per share;
15,000,000 shares authorized; 6,144,619 and
6,133,343 issued and 5,348,754 and 5,337,478
outstanding as of September 30, 2013 and
December 31, 2012, respectively |
1 | 1 | ||||||
Additional paid in capital |
46,209 | 45,973 | ||||||
Treasury stock, 795,865 shares at cost |
(6,082 | ) | (6,082 | ) | ||||
Other comprehensive loss |
(136 | ) | (189 | ) | ||||
Accumulated deficit |
(25,146 | ) | (25,406 | ) | ||||
Total stockholders equity |
14,846 | 14,297 | ||||||
Total liabilities and stockholders equity |
$ | 35,499 | $ | 31,211 | ||||
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 Companys management uses these non-GAAP measures in its analysis of the Companys 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 Companys operating results and trends that may be affecting the Companys 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 | Nine Months Ended | |||||||||||||||
Sept. 30, | Sept. 30, | Sept. 30, | Sept. 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Net income |
$ | 443 | * | $ | 174 | * | $ | 260 | ** | $ | 716 | ** | ||||
Depreciation |
295 | 237 | 843 | 661 | ||||||||||||
Amortization of intangible assets |
17 | | 52 | | ||||||||||||
Stock-based compensation |
81 | 62 | 219 | 186 | ||||||||||||
Interest expense, financing and |
154 | 128 | 426 | 390 | ||||||||||||
other related costs, net |
||||||||||||||||
Other investment (income) loss, net |
4 | 15 | (33 | ) | (16 | ) | ||||||||||
Provision for income taxes |
330 | 292 | 240 | 769 | ||||||||||||
Adjusted EBITDA |
$ | 1,324 | * | $ | 908 | * | $ | 2,007 | ** | $ | 2,706 | ** | ||||
(*) For the three months ended September 30, 2013 gift card breakage income was $30,146. For the three months ended September 30, 2012 gift card breakage income was $41,632. |
(**) For the nine months ended September 30, 2013 gift card breakage income was $90,438. The nine months ended September 30, 2012 includes the cumulative impact of the change in accounting for gift card breakage income of $441,362 plus gift card breakage income for the period of $124,896.