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 6, 2014 |
Dover Saddlery, Inc.
__________________________________________
(Exact name of registrant as specified in its charter)
| Delaware | 000-51624 | 04-3438294 |
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_____________________ (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) |
| Registrant’s 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 6, 2014, Dover Saddlery, Inc. (the "registrant") issued a press release reporting on its results of operations for the third quarter ended September 30, 2014. 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. Reconciliation to the most directly comparable GAAP measure is 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 6, 2014, Dover Saddlery, Inc. (the "registrant") issued a press release reporting on its results of operations for the third quarter ended September 30, 2014. 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. Reconciliation to the most directly comparable GAAP measure is 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 6, 2014 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 registrant’s business outlook for the balance of fiscal 2014 and beyond, overall revenue growth, 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 6, 2014 | 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 6, 2014 Press Release |
Janet Nittmann
jnittmann@doversaddlery.com
Tel 978-952-8062 x218
For Immediate Release
Dover Saddlery Reports Third Quarter 2014 Financial Results
LITTLETON, MA – November 6, 2014 — Dover Saddlery, Inc. (NASDAQ:DOVR), the leading omni-channel retailer of equestrian products, today reported financial results for the third quarter ended September 30, 2014.
Total revenues for the third quarter of 2014 increased 9.1%, or $2.1 million, to $24.7 million from $22.6 million achieved in the third quarter of 2013. Retail store channel revenues increased 16.6%, or $1.9 million, to $13.3 million and same-store sales increased 2.5% over the third quarter of 2013.
Net income for the third quarter decreased to $210,000 or $0.04 per diluted share compared to $443,000 or $0.08 achieved in the third quarter of 2013.
Adjusted EBITDA for the third quarter of 2014 declined to $1,086,000, from $1,324,000 achieved in the third 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.
Year-to-Date Results
For the first nine months of 2014, total revenues increased 8.1% to $68.8 million, from $63.6 million achieved in the corresponding period in 2013. Retail store channel revenues increased 16.5% to $35.4 million and same-store sales increased 4.0% year to date. The net loss for the third quarter of 2014 was $(71,000), or $(0.01) per diluted share, compared to a net profit of $260,000 or $0.05 per diluted share achieved in the third quarter of the prior year.
“Our same-stores sales were strong in July and August and softened in September. During the third quarter we continued our successful retail roll-out with the grand openings of our first Dover Saddlery store, in Ohio (in Cincinnati) and our third Dover store in Texas (in Houston)” said Stephen L. Day, President and CEO of Dover Saddlery. “This Fall we will be opening stores in Wellington, Florida and Pittsburgh, Pennsylvania.”
Business Outlook 2014
Dover Saddlery is planning to open two stores in the fourth quarter of 2014 which will bring the total number of retail stores to twenty-six. 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 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 Company’s business outlook for the
balance of fiscal 2014 and beyond, overall revenue growth, 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 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 | Nine Months Ended | |||||||||||||||
| Sept. 30, | Sept. 30, | Sept. 30, | Sept. 30, | |||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
Revenues, net- direct |
$ | 11,335 | $ | 11,180 | $ | 33,339 | $ | 33,175 | ||||||||
Revenues, net – retail stores |
13,339 | 11,435 | 35,420 | 30,409 | ||||||||||||
Revenues, net – total |
$ | 24,674 | $ | 22,615 | 68,759 | $ | 63,584 | |||||||||
Cost of revenues |
15,119 | 14,044 | 42,760 | 39,976 | ||||||||||||
Gross profit |
9,555 | 8,571 | 25,999 | 23,608 | ||||||||||||
Selling, general and administrative expenses |
8,978 | 7,640 | 25,750 | 22,715 | ||||||||||||
Income from operations |
577 | 931 | 249 | 893 | ||||||||||||
Interest expense, financing and other related costs, net |
172 | 154 | 482 | 426 | ||||||||||||
Other investment (income) loss |
(5 | ) | 4 | (59 | ) | (33 | ) | |||||||||
Income (loss) before income tax provision (benefit) |
410 | 773 | (174 | ) | 500 | |||||||||||
Provision (benefit) for income taxes |
200 | 330 | (103 | ) | 240 | |||||||||||
Net income (loss) |
$ | 210 | $ | 443 | $ | (71 | ) | $ | 260 | |||||||
Net income (loss) per share |
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Basic |
$ | 0.04 | $ | 0.08 | $ | (0.01 | ) | $ | 0.05 | |||||||
Diluted |
$ | 0.04 | $ | 0.08 | $ | (0.01 | ) | $ | 0.05 | |||||||
Number of shares used in per share calculation |
||||||||||||||||
Basic |
5,364,000 | 5,345,000 | 5,360,000 | 5,340,000 | ||||||||||||
Diluted |
5,727,000 | 5,534,000 | 5,360,000 | 5,524,000 | ||||||||||||
Other Operating Data: |
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Number of retail stores(1) |
24 | 19 | 24 | 19 | ||||||||||||
Capital expenditures |
924 | 567 | 1,849 | 1,312 | ||||||||||||
Gross profit margin |
38.7 | % | 37.9 | % | 37.8 | % | 37.1 | % | ||||||||
| (1) | Includes twenty-three Dover-branded stores and one Smith Brothers store. |
DOVER SADDLERY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands, unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| Sept. 30, | Sept. 30, | Sept. 30, | Sept. 30, | |||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
Net income (loss) |
$ | 210 | $ | 443 | $ | (71 | ) | $ | 260 | |||||||
Other comprehensive loss: |
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Change in fair value of |
17 | 4 | 30 | 53 | ||||||||||||
interest rate swap contract,
net of tax |
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Total comprehensive income (loss) |
$ | 227 | $ | 447 | $ | (41 | ) | $ | 313 | |||||||
DOVER SADDLERY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
(Unaudited)
| Sept. 30, | Dec. 31, | |||||||
| 2014 | 2013 | |||||||
ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ | 292 | $ | 319 | ||||
Accounts receivable |
1,336 | 1,300 | ||||||
Inventory |
29,343 | 23,633 | ||||||
Prepaid catalog costs |
1,115 | 974 | ||||||
Prepaid expenses and other current assets |
3,043 | 1,277 | ||||||
Deferred income taxes |
261 | 355 | ||||||
Total current assets |
35,390 | 27,858 | ||||||
Net property and equipment |
6,535 | 5,763 | ||||||
Other assets: |
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Deferred income taxes |
1,449 | 1,495 | ||||||
Intangibles and other assets, net |
778 | 758 | ||||||
Total other assets |
2,227 | 2,253 | ||||||
Total assets |
$ | 44,152 | $ | 35,874 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Current portion of capital lease obligations
and outstanding checks |
$ | 260 | $ | 290 | ||||
Current portion – term notes |
786 | 786 | ||||||
Current portion – Capex term loan |
792 | 630 | ||||||
Accounts payable |
3,098 | 2,352 | ||||||
Accrued expenses and other current liabilities |
6,228 | 7,201 | ||||||
Income taxes payable |
- | 1,006 | ||||||
Total current liabilities |
11,164 | 12,265 | ||||||
Long-term liabilities: |
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Revolving line of credit |
10,428 | 95 | ||||||
Capex term loan, net of current portion |
2,224 | 2,818 | ||||||
Term notes, net of current portion |
3,536 | 4,125 | ||||||
Capital lease obligation, net of current portion |
66 | 96 | ||||||
Interest rate swap contract |
135 | 189 | ||||||
Total long-term liabilities |
16,389 | 7,323 | ||||||
Stockholders’ equity: |
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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 September 30, 2014 and
December 31, 2013, respectively |
1 | 1 | ||||||
Additional paid in capital |
46,658 | 46,304 | ||||||
Treasury stock, 795,865 shares at cost |
(6,082 | ) | (6,082 | ) | ||||
Other comprehensive loss |
(92 | ) | (122 | ) | ||||
Accumulated deficit |
(23,886 | ) | (23,815 | ) | ||||
Total stockholders’ equity |
16,599 | 16,286 | ||||||
Total liabilities and stockholders’ equity |
$ | 44,152 | $ | 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 income to Adjusted EBITDA (in thousands):
| Three Months Ended | Nine Months Ended | |||||||||||||||
| Sept. 30, | Sept. 30, | Sept. 30, | Sept. 30, | |||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
Net income (loss) |
$ | 210 | $ | 443 | $ | (71 | ) | $ | 260 | |||||||
Depreciation |
382 | 295 | 1,077 | 843 | ||||||||||||
Amortization of intangible assets |
17 | 17 | 53 | 52 | ||||||||||||
Stock-based compensation |
110 | 81 | 330 | 219 | ||||||||||||
Interest expense, financing and |
172 | 154 | 482 | 426 | ||||||||||||
other related costs, net |
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Other investment (income) loss |
(5 | ) | 4 | (59 | ) | (33 | ) | |||||||||
Provision (Benefit) for income taxes |
200 | 330 | (103 | ) | 240 | |||||||||||
Adjusted EBITDA |
$ | 1,086 | $ | 1,324 | $ | 1,709 | $ | 2,007 | ||||||||