Dover Saddlery Announces First Quarter 2014 Financial Results

Dover Saddlery Announces First Quarter 2014 Financial Results 
LITTLETON, MA -- (Marketwired) -- 05/08/14 --  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, 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(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
For more information, please call 1-978-952-8062 or visit  
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                      
              (In thousands, except share and per share data)               
                                                     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                    
                         (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)                      
                                                   March 31,     Dec. 31,   
                                                     2014          2013     
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

                                                     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)
                                                 ============  ============ 

Janet Nittmann
Tel 978-952-8062 x218 
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