03.31.09 

dovr: CLOSES OUT A TOUGH YEAR WITH A Q4:08 LOSS ON GOODWILL IMPAIRMENT CHARGES
Dover reported a Q4:08 EPS loss of $2.68 yesterday, due mostly to a $14.3 million non-cash goodwill impairment charge. Absent that charge, the company was modestly profitable in a quarter in which it typically posts its best results. On a non-GAAP basis, Dover reported earnings of $0.08 per diluted share. Overall sales in the quarter continued to decline y/y, falling almost 7%. While the retail segment was up over the year-ago period, that was driven by the addition of two new retail stores. Same-store sales for existing retail sites were down 11.8% in the quarter. As for the upcoming year, management is taking a cautious stance in regard to guidance and costs despite seeing some flattening within the retail segment of their business. Consequently, they have declined to provide guidance for the upcoming quarter and full year and now plan no new stores for the upcoming year. We had previously expected two new retail stores for this year, and are now modeling no new retail sites. In addition, we see continued softness in the direct channel and ongoing same-store sales declines over the early part of the year in the retail channel as comparables remain difficult. We are currently forecasting total revenue of $77.8 million, down from our prior estimate of $84.5 million. In addition, while we are modeling better margins on tight cost controls by management, a lower top line reduces our EPS estimate for the year to $0.19, from $0.21 previously. Finally, we continue to maintain No Rating on DOVR shares due to an absence of adequate trading volume in shares. Contact Us for Full Report - PDF

11.12.08 

dovr: FINANCIAL PERFORMANCE IN Q3:08 CONTINUES TO REFLECT DIFFICULT RETAIL MARKET
Dover's most recent financial results continued to reflect a difficult retail market, although the company was able to generate positive earnings on a lower revenue base. While sales and earnings both came in below our estimates, we were not surprised given the sharp decline in consumer spending since we last modified our model. Looking ahead to the upcoming quarter, we have made several downward adjustments to our estimates given management's cautious comments around previous sales guidance ($81M to $87M), our expectations for slow holiday spending, and the delay of a new store opening to 2009. Our current forecast includes Q4:08 revenue of $23.0M ($79.6M for FY:08) and earnings of $0.10 per diluted share ($0.11 for the year)-down from $82.67M and $0.13, respectively. Our quarterly estimate assumes positive same-store retail sales of 1.0% and negative y/y growth in Web-based sales. Finally, the No Rating on Dover shares continues to be based on the lack of trading volume. Contact Us for Full Report - PDF

08.28.08 

dovr: MAKING FURTHER ADJUSTMENTS TO FY:08 ESTIMATES
We made several adjustments to our model recently that result in higher revenue and lower negative FCF for FY:08, but a penny reduction in our EPS estimate to $0.13. These adjustments were largely driven by the addition of a new retail store in November, slower traction with a few stores opened in 2006/07, and better working capital management. Our current revenue estimate for FY:08 is $82.67M, up from $82.56M, while our annual earnings estimate is down a penny to $0.13. In addition, our negative FCF forecast falls to $3.34M, from $4.49M previously. Our revenue and earnings estimates for the upcoming quarter remain unchanged. Contact Us for Full Report - PDF

08.13.08 

dovr: IMPROVED Q2:08 SEQUENTIAL RESULTS BUT FLAT Y/Y REVENUE GROWTH
Dover delivered improved sales over the first quarter of this year, and returned to profitability, but operations continued to be adversely affected by a poor U.S. economy. On a y/y basis, overall revenue remained relatively flat, while gross margin continued to remain under pressure from higher commodity and freight costs, and EPS fell by two cents. Nevertheless, the Company was able to pass along most price increases and SG&A costs were kept well under control, resulting in GAAP earnings of $0.05 on 5.3M diluted shares. During the period, the Company opened one new retail store in New Jersey. Looking ahead, management lowered both the top and lower end of their revenue guidance to $81M to $87M, from $87M-$92M, on continued sluggish customer spending expectations. In addition, they reduced the number of new retail store openings for the year to three, from 4-6. Consequently, based on our dour outlook for the economy and the results of the recent financial release, we once again lowered our sales for the year to $82.6M and reduced our EPS estimate to $0.14 from $0.23. We are basing our new forecast on two new retail sites over the balance of FY:08 and slow revenue improvement in the upcoming quarter. Contact Us for Full Report - PDF

05.09.08 

dovr: A SLOW FINISH TO FQ1:08
Dover released its FQ1:08 results on May 7th, followed by a conference call yesterday morning. Due to soft consumer demand primarily in March, revenue declined 4.9% y/y to $17.7 million on both negative same store sales of 0.7% and a 9.3% y/y decline in direct sales. Revenue fell well below our estimate of $20.3 million. Consequently, the Company reported both an operating and earnings loss per share for the period of $231,000 and $0.07, respectively. That said, management confirmed prior full-year guidance of $87 million to $97 million and highlighted improvements in customer activity thus far in FQ2:08. However, as we pointed out in our Initiation report on April 28th, we have seen a fair amount of economic sensitivity by affluent consumers in their purchases of luxury goods. Consequently, based on the results from FQ1:08 and the apparent slowdown in spending by upper income households, we are lowering our revenue estimate for the upcoming quarter from $21.9 million to $20.6 million and our FY:08 revenue estimate from $90 million to $84.9 million. Our EPS estimate for FQ2:08 also falls by three cents to $0.05, and for the year by twelve cents to $0.23. While we recognize our full-year revenue estimate is below management's forecast, we prefer to take a more guarded stance toward revenue growth this year. Contact Us for Full Report - PDF

04.28.08 

dovr: INITIATING COVERAGE
We are initiating coverage of Dover Saddlery, Inc., with CY:08 estimated earnings of $0.35 per share on revenue of $90.0 million (10.6% y/y growth). While the Company faces several significant challenges over the next 2-3 years as it expands its store base and seeks to increase operating margins, we believe that Dover has a unique opportunity to capitalize on a large domestic market with virtually no competitors with any meaningful market presence. In addition, we believe that the Company's careful approach to new store builds offsets some of the normal risk associated with retail expansion. That said, we think that shares should continue to remain range bound over the near term given the minimal average daily trading volume. Contact Us for Full Report - PDF