Dover Saddlery Announces First Quarter 2013 Financial Results and Restatement of 2011 and 2012 Financial Results

Dover Saddlery Announces First Quarter 2013 Financial Results and Restatement 
of 2011 and 2012 Financial Results 
LITTLETON, MA -- (Marketwired) -- 06/05/13 --  Dover Saddlery, Inc.
(NASDAQ: DOVR), the leading multi-channel retailer of equestrian
products, today reported financial results for the first quarter
ended March 31, 2013. 
Total revenues for the first quarter of 2013 were $18.0 million; a
decline of 0.7% from $18.1(restated) million, achieved in the first
quarter of 2012. In the first quarter of 2012 there was a one-time
benefit of reporting past gift card breakage of $441,362 (restated).
Retail channel revenues increased 5.6% to $7.2 million, while
same-store sales decreased 8.1%. 
The net loss for the first quarter of 2013 was $(538,000), or $(0.10)
per diluted share, compared to a net profit of $142,000 (restated) or
$0.03 per diluted share achieved in the first quarter of the prior
year. The net profit in the first quarter of 2012 was affected by the
one-time gift card breakage revenue of $441,362 (restated).  
"The first quarter of 2013 was a very challenging one," commented
Stephen L. Day, president and CEO of Dover Saddlery. "Heavy snowfalls
in our retail-store regions resulted in several of our stores being
unable to open and a total of 71 store days of sales being heavily
affected by the snowstorms. The weather also delayed the start of the
horse show season in many areas, suppressing the demand for new show
attire and tack. However, Spring finally arrived and for the last two
weeks ending June 2, same-store sales were up approximately 12%."  
During the review of the 2013 first quarter consolidated financial
statements, management discovered that certain estimates of its gift
card liabilities in 2011 and 2012 were materially overstated due to
errors in accumulating and summarizing detail gift card activity,
even after the newly implemented gift card breakage reduction was
applied. Our investigation determined that the Company had material
weakness in our internal control over financial reporting in
accounting for gift card liabilities as of December 31, 2011 and
2012. We concluded that the financial statements for the twelve month
periods ending December 31, 2011 and December 31, 2012 should
therefore be restated and that prior financial statements and results
for all reporting periods during 2011 and 2012 should no longer be
relied upon by investors. In finalizing its restated financial
statements, the Company made certain error adjustments to correct its
overstatement of gift card liabilities for the quarters ended March
31, June 30 and September 30, 2011 and 2012 and for the years ended
December 31, 2011 and 2012. These adjustments relate solely to the
Company's accounting for gift card liabilities. A reconciliation of
the adjustments made to the prior year financial statements is been
provided in the Company's Quarterly Reports on Form 10-Q/A and Annual
Report on Form 10-K/A, which is being filed today. 
As a result of this restatement, net revenues were understated by
$504,556 and $293,657 for the years ending December 31, 2011 and
December 31, 2012 respectively. Net income was understated by
$305,655 and $126,985 for the years ending December 31, 2011 and
December 31, 2012 respectively. 
In addition the other liabilities account on the balance sheet which
contains the gift card liabilities was reduced by $504,556 and
$798,210 for the years ending December 31, 2011 and December 31, 2012
respectively. 
Going forward management will use the itemization method of
estimating gift card liabilities based on a new database to track
each gift card from January 1, 2013. 
Today's Teleconference and Webcast  
Dover Saddlery executives will host a conference call at 4:30pm 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) 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(R) 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(R), Dover
Saddlery(R) and Smith Brothers(R) are registered marks of Dover
Saddlery.  
For more information, please call 1-978-952-8062 or visit
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 2013,
the prospects for improved consumer sentiment, favorable retail
shopping conditions, overall revenue growth, gross margins and
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,
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. 
Janet Nittmann
jnittmann@doversaddlery.com
Tel 978-952-8062 x218 
 
 
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