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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 þ      QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Fiscal Quarter Ended September 30, 2006
 OR
 o      TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission File Number 000-51624
 DOVER SADDLERY, Inc.
 (Exact name of registrant as specified in its charter)
 DELAWARE
(State of other jurisdiction of 
incorporation or organization)
    
    04-3438294
(I.R.S. Employer Identification No.)
 525 Great Road, Littleton, MA 01460
(Address of principal executive offices)
 (978) 952-8062 (Registrants telephone number, including area code)
  þ o
  o o þ
  o þ




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##### 



DOVER SADDLERY, INC. AND SUBSIDIARIES
 INDEX TO QUARTERLY REPORT ON FORM 10-Q
 FOR THE QUARTER ENDED SEPTEMBER 30, 2006
 PagePART I  FINANCIAL INFORMATIONItem 1. Condensed Consolidated Financial Statements (unaudited)Condensed Consolidated Balance Sheets at September 30, 2006 and December 31, 2005
    
    
    3Condensed Consolidated Statements of Income for the three months ended September 30,
2006 and September 30, 2005 and the nine months ended September 30, 2006 and
September 30, 2005
    
    
    4Condensed Consolidated Statements of Cash Flows for the nine months ended September
30, 2006 and September 30, 2005
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 3. Quantitative and Qualitative Disclosures about Market RiskItem 4. Controls and ProceduresPART II  OTHER INFORMATIONItem 1.
Legal ProceedingsItem 1A. Risk FactorsItem 2. Use of Proceeds from Registered SecuritiesItem 5.
Other InformationItem 6.
ExhibitsSIGNATURESEX-10.47 First Amendment and Extension to Lease Agreement dated September 2006 between C. E. Hoffman Limited Partnership and Dovery Saddlery, Inc.EX-31.1 PEO Certification Rule 13a-14(a) or Rule 15d-14(a)EX-31.2 PFO Certification Rule 13a-14(a) or Rule 15d-14(a)EX-32.1 CEO and CFO Certification section 1350




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##### Table of Contents



PART IFINANCIAL INFORMATION
 
 Item 1. Condensed Consolidated Financial Statements
 DOVER SADDLERY, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (in thousands, except share amounts)
 September 30, 2006
    
    
    December 31, 2005(Unaudited)Current assets:Cash and cash equivalents
    
    $
    149
    
    
    $
    2,887Accounts receivable
    
    
    787
    
    
    
    160Inventory
    
    
    12,952
    
    
    
    10,072Prepaid catalog costs
    
    
    2,396
    
    
    
    1,601Prepaid expenses and other current assets
    
    
    1,067
    
    
    
    1,136Total current assets
    
    
    17,351
    
    
    
    15,856Capital Equipment
    
    
    2,129
    
    
    
    1,729Other assets:Deferred income tax assets
    
    
    313
    
    
    
    254Goodwill and other assets, net
    
    
    14,958
    
    
    
    13,838Total other assets
    
    
    15,272
    
    
    
    14,092Total assets
    
    $
    34,751
    
    
    $
    31,677Current liabilities:Short term bank borrowing and current portion of
capital lease obligations
    
    $
    352
    
    
    $
    171Accounts payable
    
    
    3,773
    
    
    
    2,629Accrued expenses and other current liabilities
    
    
    2,296
    
    
    
    2,949Deferred income tax liabilities
    
    
    373
    
    
    
    274Total current liabilities
    
    
    6,794
    
    
    
    6,023Long-term liabilities:Revolving line of credit
    
    
    6,600
    
    
    
    5,000Subordinated notes payable
    
    
    3,000
    
    
    
    3,000Capital lease obligations, net of current portion
    
    
    168
    
    
    
    272Total long-term liabilities
    
    
    9,768
    
    
    
    8,272Stockholders equity:Common Stock, par value $0.0001 per share;
15,000,000 shares authorized, issued 5,074,344
as of September 30, 2006 and December 31, 2005
    
    
    1
    
    
    
    1Additional paid in capital
    
    
    43,883
    
    
    
    43,883Accumulated other comprehensive income
    
    
    14
    
    
    
    48Treasury Stock, 795,865 shares at cost
    
    
    (6,082
    )
    
    
    (6,082
    )Retained deficit
    
    
    (19,627
    )
    
    
    (20,468
    )18,189
    
    
    
    17,382Total liabilities and stockholders equity
    
    $
    34,751
    
    
    $
    31,677




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DOVER SADDLERY, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME  (unaudited)
 (in thousands, except per share data)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Net sales
    
    $
    17,192
    
    
    $
    13,959
    
    
    $
    52,006
    
    
    $
    44,538Cost of products and merchandising
    
    
    10,896
    
    
    
    8,689
    
    
    
    33,252
    
    
    
    28,184Gross margin
    
    
    6,296
    
    
    
    5,270
    
    
    
    18,754
    
    
    
    16,354Selling, general and administrative expenses
    
    
    5,751
    
    
    
    4,640
    
    
    
    16,685
    
    
    
    13,867Operating income
    
    
    545
    
    
    
    630
    
    
    
    2,069
    
    
    
    2,487Interest income
    
    
    6
    
    
    
    13
    
    
    
    43
    
    
    
    13Interest expense
    
    
    254
    
    
    
    483
    
    
    
    723
    
    
    
    1,284Interest expense, net
    
    
    248
    
    
    
    470
    
    
    
    680
    
    
    
    1,271Income before taxes
    
    
    297
    
    
    
    160
    
    
    
    1,389
    
    
    
    1,216Income tax provision
    
    
    99
    
    
    
    77
    
    
    
    548
    
    
    
    581Net income
    
    $
    198
    
    
    $
    83
    
    
    $
    841
    
    
    $
    635Earnings per share:Basic
    
    $
    0.04
    
    
    $
    0.02
    
    
    $
    0.17
    
    
    $
    0.17Diluted
    
    $
    0.04
    
    
    $
    0.02
    
    
    $
    0.16
    
    
    $
    0.14Weighted average shares outstanding:Basic
    
    
    5,074
    
    
    
    3,030
    
    
    
    5,074
    
    
    
    3,055Diluted
    
    
    5,191
    
    
    
    4,337
    
    
    
    5,200
    
    
    
    4,503




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DOVER SADDLERY, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (in thousands)
 (unaudited)
 Nine Months EndedSeptember 30,2006
    
    
    2005Operating activitiesNet income
    
    $
    841
    
    
    $
    635Adjustments to reconcile net income to net cash used in operating activities:Depreciation and amortization
    
    
    439
    
    
    
    487Deferred income taxes
    
    
    62
    
    
    
    169Amortization of stock based compensation
    
    
    
    
    
    
    104Non-cash interest expense and amortization of deferred financing fees
    
    
    157
    
    
    
    412Changes in current assets and liabilities:Accounts receivable
    
    
    (627
    )
    
    
    (774
    )Inventory
    
    
    (2,236
    )
    
    
    (1,040
    )Prepaid catalog costs and other expenses
    
    
    (771
    )
    
    
    (1,568
    )Accounts payable & short term borrowings
    
    
    1,325
    
    
    
    148Accrued expenses and other current liabilities
    
    
    (940
    )
    
    
    (823
    )Net cash used in operating activities
    
    
    (1,750
    )
    
    
    (2,250
    )Investing activitiesAcquisition of Dominion
    
    
    (1,522
    )
    
    
    Purchases of capital equipment
    
    
    (733
    )
    
    
    (477
    )Change in other assets
    
    
    (205
    )
    
    
    21Cash used in investing activities
    
    
    (2,460
    )
    
    
    (456
    )Financing activitiesBorrowings under revolving line of credit
    
    
    6,250
    
    
    
    9,700Payments under revolving line of credit
    
    
    (4,650
    )
    
    
    (5,000
    )Proceeds from issuance of senior subordinated notes
    
    
    
    
    
    
    8,050Payments to redeem senior subordinated notes
    
    
    
    
    
    
    (3,808
    )Payments of commitment and financing fees
    
    
    (24
    )
    
    
    (418
    )Purchase of treasury stock
    
    
    
    
    
    
    (6,000
    )Proceeds from employee stock option exercises
    
    
    
    
    
    
    21Repayment of employee notes receivable
    
    
    
    
    
    
    282Payments on capital leases
    
    
    (104
    )
    
    
    (130
    )Net cash provided by financing activities
    
    
    1,472
    
    
    
    2,697Net decrease in cash and cash equivalents
    
    
    (2,738
    )
    
    
    (9
    )Cash and cash equivalents at beginning of period
    
    
    2,887
    
    
    
    64Cash and cash equivalents at end of period
    
    $
    149
    
    
    $
    55Supplemental disclosure of cash flow informationCash paid during the period for:Interest
    
    $
    562
    
    
    $
    515Income taxes
    
    $
    472
    
    
    $
    406Supplemental disclosure of non-cash financing activitiesEquipment acquired under capital leases
    
    $
    
    
    
    $
    214




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##### Table of Contents



DOVER SADDLERY, INC. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (unaudited)
 A. Nature of business and basis of preparation:
    B. Acquisition
  Business Combinations
  Total purchase price, including closing costs of approximately $56:
    
    $
    1,522Inventories
    
    
    644Other Assets
    
    
    11Total assets acquired
    
    
    655Current liabilities
    
    
    264Total liabilities assumed
    
    
    264Net assets acquired
    
    
    391Excess purchase price over the fair value of net assets acquired
    
    $
    1,131




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##### Table of Contents



Nine months ended
    
    Nine months ended(Pro forma, un-audited, in thousands, except per share data)
    
    Sept. 30, 2006
    
    Sept. 30 , 2005Net sales
    
    $
    53,405
    
    
    $
    46,614Income before extraordinary items cumulative effect of accounting changes
    
    
    923
    
    
    
    731Net income
    
    $
    923
    
    
    $
    731Net income per share
    
    $
    0.18
    
    
    $
    0.16
  Goodwill Balance  December 31, 2005
    
    
    13,136Acquisition of Dominion Goodwill
    
    
    1,131Goodwill Balance  September 30, 2006
    
    
    14,267
 C. Accounting for stock-based compensation:
 Share Based Payment Accounting for Stock issued to Employees Accounting for Stock Based Compensation
  ThreeMonthsEnded
    
    
    Nine MonthsSeptember
    
    
    Ended30,
    
    
    September 30,2005
    
    
    2005Net income, as reported:
    
    $
    83
    
    
    $
    635Add: Employee
stock-based compensation
expense included in
reported net income
    
    
    7
    
    
    
    104Deduct: Stock-based
compensation expense
determined under fair
value-based method for
all employee awards
    
    
    90
    
    
    
    270Pro forma
    
    $
    0
    
    
    $
    469Earnings per share:Basic
    
    $
    0.00
    
    
    $
    0.12Diluted
    
    
    0.00
    
    
    
    0.10




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##### Table of Contents



D. Inventory:
  E. Advertising:
 Reporting on
Advertising Costs.
 F. Comprehensive Income:
  For the Nine Months ended September 30(in thousands)2006
    
    
    2005Net income
    
    $
    841
    
    
    $
    635Unrealized (loss)/gain on interest rate swap
    
    
    (34
    )
    
    
    64Net comprehensive income
    
    $
    807
    
    
    $
    699
 G. Earnings per share:
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Basic weighted average common shares outstanding
    
    
    5,074
    
    
    
    3,030
    
    
    
    5,074
    
    
    
    3,055Add: Dilutive effect of convertible preferred stock
    
    
    
    
    
    
    1,115
    
    
    
    
    
    
    
    1,264Dilutive effect of assumed stock option and
warrant exercises less potential incremental
shares purchased under the treasury method
    
    
    117
    
    
    
    192
    
    
    
    126
    
    
    
    184Diluted weighted average common shares outstanding
    
    
    5,191
    
    
    
    4,337
    
    
    
    5,200
    
    
    
    4,503Earnings per share:Basic
    
    $
    0.04
    
    
    $
    0.02
    
    
    $
    0.17
    
    
    $
    0.17Diluted
    
    $
    0.04
    
    
    $
    0.02
    
    
    $
    0.16
    
    
    $
    0.14
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Net Income:
    
    $
    198
    
    
    $
    83
    
    
    $
    841
    
    
    $
    635Preferred stock dividends
    
    
    
    
    
    
    (33
    )
    
    
    
    
    
    
    (113
    )Net Income available to common stockholders
    
    
    198
    
    
    
    50
    
    
    
    841
    
    
    
    522




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H. Debt:
 Revolving Credit Facility
     Subordinated Notes Payable
   I. Income Taxes
  J. Related Party Transactions




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K. Commitments and contingencies:
 Lease commitments
   Contingencies
    
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 This Quarterly Report on Form 10-Q, including the following discussion, contains forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve
substantial risks and uncertainties. For this purpose, any statements contained herein that are not
statements of historical fact may be deemed to be forward-looking statements. Without limiting the
generality of the foregoing, the words projected, anticipated, planned, expected and
similar expressions are intended to identify forward-looking statements. In particular, statements
regarding future financial targets or trends are forward-looking statements. Forward-looking
statements are not guarantees of our future financial performance, and undue reliance should not be
placed on them. Our actual results, performance or achievements may differ significantly from the
results, performance or achievements discussed in or implied by the forward-looking statements.
Factors that could cause such a difference detailed in Item 1A. Risk Factors in our Annual Report
on Form 10-K for the fiscal year ended December31, 2005 (fiscal 2005). We disclaim any intent or
obligation to update any forward-looking statements
 Overview




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Results of Operations
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Net sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of products and merchandising
    
    
    63.4
    
    
    
    62.2
    
    
    
    63.9
    
    
    
    63.3Gross margin
    
    
    36.6
    
    
    
    37.8
    
    
    
    36.1
    
    
    
    36.7Selling, general and administrative expenses
    
    
    33.5
    
    
    
    33.2
    
    
    
    32.1
    
    
    
    31.1Operating income
    
    
    3.2
    
    
    
    4.6
    
    
    
    4.0
    
    
    
    5.6Interest income
    
    
    0.1
    
    
    
    0.1
    
    
    
    0.1
    
    
    
    0.0Interest expense
    
    
    1.5
    
    
    
    3.5
    
    
    
    1.4
    
    
    
    2.9Interest (income) expense, net
    
    
    1.4
    
    
    
    3.4
    
    
    
    1.3
    
    
    
    2.9Income before taxes
    
    
    1.8
    
    
    
    1.2
    
    
    
    2.7
    
    
    
    2.7Income tax provision
    
    
    0.6
    
    
    
    0.6
    
    
    
    1.1
    
    
    
    1.3Net income
    
    
    1.2
    %
    
    
    0.6
    %
    
    
    1.6
    %
    
    
    1.4
    %
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Net sales:Revenue, net  direct
    
    $
    13,433
    
    
    $
    11,579
    
    
    $
    43,289
    
    
    
    37,897Revenue, net  retail stores
    
    
    3,759
    
    
    
    2,380
    
    
    
    8,717
    
    
    
    6,641Revenue, net  total
    
    $
    17,192
    
    
    $
    13,959
    
    
    $
    52,006
    
    
    
    44,538Other operating data:Number of retail stores(2)
    
    
    5
    
    
    
    4
    
    
    
    5
    
    
    
    4Capital expenditures
    
    
    571
    
    
    
    129
    
    
    
    733
    
    
    
    477Gross profit margin
    
    
    36.6
    %
    
    
    37.8
    %
    
    
    36.1
    %
    
    
    36.7
    %EBITDA (1)
    
    
    687
    
    
    
    802
    
    
    
    2,508
    
    
    
    3,078EBITDA margin (1)
    
    
    4.00
    %
    
    
    5.75
    %
    
    
    4.82
    %
    
    
    6.91
    %
 
 (1)
    
    When we use the term EBITDA, we are referring to net income minus interest income
plus interest expense, income taxes and depreciation and amortization. We present EBITDA
because we consider it an important supplemental measure of our performance and believe it
is frequently used by securities analysts, investors and other interested parties in the
evaluation of companies in our industry.(2)
    
    Does not include the three Dominion stores open for
liquidation of inventory during Q3, or the fourth store closed for renovation.
Includes new Dover store in Hunt Valley, MD, opened September 29, 2006.




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Comparison of Third Quarter Fiscal 2006 to Third Quarter Fiscal 2005
 Revenues
  Gross Profit
  Selling, General and Administrative
  Interest Expense
  Income Tax Provision
  Net Income




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Comparison of the Nine Months Ended September 30, 2006 to the Nine Months Ended September 30, 2005
 Revenues
  Gross Profit
  Selling, General and Administrative
  Interest Expense
  Income Tax Provision
  Net Income
  Seasonality and Quarterly Fluctuations




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Liquidity and Capital Resources
  Operating Activities
  Investing Activities
  Financing Activities
  Revolving Credit Facility
  Senior Subordinated Note and Warrant




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Working Capital and Capital Expenditure Needs
  Contractual Obligations
  Payments Due by September 30,2007
    
    2008
    
    2009
    
    2010
    
    2011
    
    Total(in thousands)Short-term bank borrowings
    
    $
    211
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    211Capital leases
    
    
    140
    
    
    
    103
    
    
    
    61
    
    
    
    5
    
    
    
    
    
    
    
    309Operating leases
    
    
    1,577
    
    
    
    1,563
    
    
    
    1,483
    
    
    
    1,152
    
    
    
    1,829
    
    
    
    7,604Revolving credit facility
    
    
    
    
    
    
    6,600
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,600Senior subordinated notes
    
    
    
    
    
    
    
    
    
    
    3,000
    
    
    
    
    
    
    
    
    
    
    
    3,000Total
    
    $
    1,928
    
    
    $
    8,266
    
    
    $
    4,544
    
    
    $
    1,157
    
    
    $
    1,829
    
    
    $
    17,724
 Critical Accounting Policies and Estimates
  Recent Accounting Pronouncements




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Item 3. Quantitative and Qualitative Disclosures about Market Risk
   Foreign Currency Risk
  Interest Rate Sensitivity
   
 Item 4. Controls and Procedures




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##### Table of Contents



PART IIOTHER INFORMATION
 
 Item 1. Legal Proceedings
    
 Item 1A. Risk Factors
   Our market is highly competitive and we may not continue to compete successfully.
 We may be unable to continue to open new stores and enter new markets successfully.




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##### Table of Contents



Our growth may strain operations, which could adversely affect our business and financial
results.
 Our operating results may be impacted by changes in the economy.
 Our stock price may fluctuate based on market expectations.
 Our quarterly operating results are subject to significant fluctuation.
 If businesses we acquire do not perform as well as we expect or have liabilities that we are
not aware of, we could suffer consequences that would substantially reduce our revenues, earnings
and cash flows.
 The future sale of shares of our common stock may negatively impact our stock price.




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Item 2. Use of Proceeds from Registered Securities
  
 Item 5. Other Information




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##### Table of Contents



Item 6. Exhibits
 EXHIBIT LIST
 Number
    
    Description*1.1
    
    Form of Underwriting Agreement*3.1
    
    Amended and Restated Certificate of Incorporation of the Company*3.2
    
    Certificate of Amendment to Certificate of Incorporation of the Company*3.3
    
    Second Amended and Restated Certificate of Incorporation of the Company to be filed upon completion of this offering*3.4
    
    By-laws of the Company*3.5
    
    Amended and Restated By-laws of the Company to be effective upon completion of this offering*4.1
    
    Shareholders Agreement, dated as of September 17, 1998, by and among the Company, Stephen L. Day, Jonathan A.R.
Grylls, David Post, Donald Motsenbocker, Thomas Gaines, David J. Powers, James F. Powers, and Michele R. Powers*4.2
    
    First Amendment to Shareholders Agreement, dated as of August 29, 2003, by and among the Company, Stephen L. Day,
Jonathan A.R. Grylls, David Post, Thomas Gaines, David J. Powers, James F. Powers, and Michele R. Powers*4 .3
    
    Second Amendment to Shareholders Agreement, dated as of August 25, 2005, by and among a majority in interest of the
Purchasers (as defined therein) and a majority in interest of the Sellers (as defined therein)*4 .4
    
    Instrument of accession, dated as of September 16, 2005, signed by Citizens Ventures, Inc. and accepted by the
Company, to that certain Shareholders Agreement, dated as of September 17, 1998, by and among the Company and the
Shareholders referenced therein, as amended*4 .5
    
    Form of Common Stock Certificate*4 .6
    
    Warrant to purchase common stock of the Company issued to Patriot Capital Funding, Inc.*4 .7
    
    Amended and Restated 11.50% Senior Secured Subordinated Note, dated September 16, 2005, issued jointly by the
Company, Dover Massachusetts and Smith Brothers, Inc. to Patriot Capital Funding, LLC I*5 .1
    
    Opinion of Bingham McCutchen LLP*5 .2
    
    Opinion of Preti Flaherty Beliveau Pachios & Haley LLP




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##### Table of Contents



Number
    
    Description*10 .1
    
    1999 Stock Option Plan (the 1999 Plan)*10 .2
    
    Form of Stock Option Agreement under the 1999 Plan*10 .3
    
    2005 Equity Incentive Plan (the 2005 Plan)*10 .4
    
    Form of Stock Option Agreement under the 2005 Plan*10 .5
    
    Form of Restricted Stock Award Agreement under the 2005 Plan*10 .6
    
    Lease, dated as of May 29, 1997, by and between Dover Massachusetts and CE Holman, LLP*10 .7
    
    Lease, dated as of October 12, 2001, by and between David F. Post and Dover Massachusetts*10 .8
    
    Lease, dated as of March 1, 2003, by and between Smith Brothers, Inc. and JDS Properties, LLC*10 .9
    
    Letter dated February 9, 2005 from the Company to JDS Properties, LLC regarding lease extension*10 .10
    
    Lease, dated as of June 22, 2002, by and between Hockessin Square, L.L.C. and Dover Massachusetts*10 .11
    
    Letter dated January 25, 2005 from the Company to Hockessin Square, L.L.C. regarding lease extension*10 .12
    
    Lease, dated as of November 24, 2003, by and between North Conway Holdings, Inc. and Dover
Massachusetts*10 .13
    
    Stock Purchase Agreement, dated as of August 14, 1998, by and among the Company, James F. Powers,
David J. Powers and Michele R. Powers*10 .14
    
    First Amendment to Stock Purchase Agreement, dated as of August 14, 1998, by and among the Company,
James F. Powers, David J. Powers and Michele R. Powers*10 .15
    
    Amendment to Stock Purchase Agreement, dated as of September 17, 1998, by and among the Company,
James F. Powers, David J. Powers and Michele R. Powers*10 .16
    
    Amended and Restated Loan Agreement, dated as of December 11, 2003, by and between Dover
Massachusetts and Fleet National Bank*10 .17
    
    Amendment to Loan Agreement, dated as of December 11, 2003, by and between Dover Massachusetts and
Fleet National Bank*10 .18
    
    Amended and Restated Security Agreement, dated as of December 11, 2003, by and between Dover
Massachusetts and Fleet National Bank*10 .19
    
    Amended and Restated Pledge Agreement, dated as of December 11, 2003, by and between the Company
and Fleet National Bank*10 .20
    
    Shareholder Pledge Agreement, dated as of September 17, 1998, by and among Stephen L. Day, Jonathan
A.R. Grylls, David J. Powers, James F. Powers, Michele R. Powers and BankBoston, N.A.*10 .21
    
    Amended and Restated Revolving Credit Note, dated as of December 11, 2003, by Dover Massachusetts
for the benefit of Fleet National Bank*10 .22
    
    Letter agreement, dated as of September 16, 2005, by and between Dover Massachusetts and Bank of
America, N.A. (successor by merger to Fleet National Bank)*10 .23
    
    Security Agreement, dated as of December 11, 2003, by and between Smith Brothers, Inc. and Fleet
National Bank*10 .24
    
    Guaranty, dated as of December 11, 2003, by Smith Brothers, Inc. to Fleet National Bank*10 .25
    
    Redemption Agreement, dated as of August 25, 2005, by and between the Company and Citizens
Ventures, Inc.*10 .26
    
    Letter agreement, dated as of September 14, 2005, by and between the Company and Citizens Ventures,
Inc., amending that certain Redemption Agreement, dated as of August 26, 2005, by and between the
Company and Citizens Ventures, Inc.*10 .27
    
    License Agreement, dated as of February 10, 2003, by and between Weatherbeeta PTY LTD and the
Company




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##### Table of Contents



Number
    
    Description*10 .28
    
    Settlement Agreement, dated as of December 22, 2003, by and between Libertyville Saddle Shop, Inc.
and the Company*10 .29
    
    Employment Agreement, dated as of September 1, 2005, by and between Stephen L. Day and the Company*10 .30
    
    Employment Agreement, dated as of September 1, 2005, by and between Jonathan A.R. Grylls and the
Company*10 .31
    
    Amended and Restated Subordination Agreement, dated as of September 16, 2005, by and among Bank of
America, N.A. (successor by merger to Fleet National Bank), Patriot Capital Funding, Inc.
(successor in interest to Wilton Funding, LLC) and Dover Massachusetts, acknowledged by the
Company and Smith Brothers, Inc.*10 .32
    
    Amended and Restated Senior Subordinated Note and Warrant Purchase Agreement, dated as of
September 16, 2005, by and among the Company, Dover Massachusetts, Smith Brothers, Inc., Patriot
Capital Funding, Inc. and the Purchasers referenced therein*10 .33
    
    Amended and Restated Security Agreement, dated as of September 16, 2005, by and among the Company,
Dover Massachusetts, Smith Brothers, Inc. and Patriot Capital Funding, Inc.#10 .34(1)
    
    Amendment No. 1 to the Employment Agreement dated as of September 1, 2005 with Stephen L. Day#10 .35(2)
    
    Amendment No. 1 to the Employment Agreement dated as of September 1, 2005 with Jonathan A.R. Grylls#10 .36(4)
    
    Second Amendment dated as of March 28, 2006 to Amended and Restated Loan Agreement with Bank of
America.#10 .37(5)
    
    Amendment No. 1 dated as of March 28, 2006 to Amended and Restated Senior Subordinated Note and
Warrant Purchase Agreement with Patriot Capital Funding, Inc.^^10 .38
    
    Agreement of Lease dated March 29, 2006 by and between the Company and Sparks Lot Seven, LLC++10 .39
    
    Commercial Lease executed as of March 9, 2001 between Marvid Crabyl, LLC and Dover Saddlery, Inc.,
as amended and extended.++10 .40
    
    Stock Purchase Agreement dated as of May 19, 2006 among Dover Saddlery, Inc., Dover Saddlery
Retail, Inc., Old Dominion Enterprises, Inc. and Reynolds Young, as amended++10 .41
    
    Lease made as of June, 2006 between Humphrey and Rodgers and Dover Saddlery Retail, Inc.++10 .42
    
    Agreement of Lease for Shopping Center Space between Sequel Investors Limited Partnership and Old
Dominion Enterprises, Inc. Dated as of May 20, 1997, as amended.++10 .43
    
    LBs of Virginia Building Lease Agreement dated November 1, 2000, as amended.++10 .44
    
    Lease agreement made July 10, 2006 between Hopkins Roads Associates and Dover Saddlery Retail, Inc.++10 .45(6)
    
    Consent and Amendment No. 2, dated June 29, 2006, to Amended and Restated Senior Subordinated Note
and Warrant Purchase Agreement with Patriot Capital Funding, Inc.++10 .46(7)
    
    Waiver letter dated as of June 27, 2006 between Bank of America, N.A. and Dover Saddlery, Inc.^10 .47(8)
    
    First Amendment and Extension to Lease Agreement dated September 2006 between C.E. Holman Limited
Partnership and Dover Saddlery, Inc.#14 .1(3)
    
    Code of Business Conduct and Ethics++21 .1
    
    Subsidiaries of the Company*23 .1
    
    Consent of Bingham McCutchen LLP (included in Exhibit 5.1)**23 .2
    
    Consent of Ernst & Young LLP*23 .3
    
    Consent of Preti Flaherty Beliveau Pachios & Haley PLLC (included in Exhibit 5.2)*24 .1
    
    Power of Attorney^31 .1
    
    Certification of Principal Executive Officer of Periodic Report Pursuant to Rule 13a-14(a) or Rule
15d-14(a)^31 .2
    
    Certification of Principal Financial Officer of Periodic Report Pursuant to Rule 13a-14(a) or Rule
15d-14(a)^32 .1
    
    Certification by Chief Executive Officer and Chief Financial Officer of Periodic Report Pursuant
to 18 U.S.C. Section 1350*99 .1
    
    Consent of William F. Meagher, Jr.
 
 ^
    
    Filed herewith++
    
    Filed with the Companys Quarterly Report on Form 10Q for the Fiscal Quarter Ending June 30, 2006, on August 14, 2006.*
    
    Incorporated by reference herein to the exhibits to the Companys Registration Statement on Form S-1 (File No. 333-127888)**
    
    Incorporated by reference to the exhibit to the Companys Registration Statement on Form S-8 on April 3, 2006#
    
    Filed with the Companys Annual Report on Form 10-K for the Fiscal Year Ending December 31, 2005, on March 30, 2006^^
    
    Filed with the Companys Quarterly Report on Form 10Q for the Fiscal Quarter Ending March 31, 2006, on May 15, 2006.
    
    Indicates a management contract or compensatory plan or arrangement




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##### Table of Contents



(1)
    
    Amends Employment Agreement filed with the Companys Registration Statement on Form S-1 on August 26, 2005 as Exhibit
10.30(2)
    
    Amends Employment Agreement filed with the Companys Registration Statement on Form S-1 on August 26, 2005 as Exhibit
10.31(3)
    
    Amends and restates Code of Conduct and Ethics filed with the Companys Registration Statement on Form S-1/ A on October
2, 2005 as Exhibit 14.1(4)
    
    Amends Amended and Restated Loan Agreement dated as of December 11, 2003, with Fleet National Bank, filed with the
Companys Registration Statement on Form S-1 on August 26, 2005 as Exhibit 10.16(5)
    
    Amends Amended and Restated Senior Subordinated Note and Warrant Purchase Agreement dated as of September 16, 2005, with
Patriot Capital Funding, Inc., filed with the Companys Registration Statement on Form S-1/A on October 5, 2005 as Exhibit
10.32.(6)
    
    Amends Amended and Restated Senior Subordinated Note and Warrant Purchase Agreement dated as of September 16, 2005, with
Patriot Capital Funding, Inc., filed with the Companys Registration Statement on Form S-1/A on October 5, 2005 as Exhibit
10.32.(7)
    
    Pertains to Amended and Restated Loan Agreement dated as of December 11, 2003, with Fleet National Bank, filed with the
Companys Registration Statement on Form S-1 on August 26, 2005 as Exhibit 10.16.(8)
    
    Amends Lease, dated as of May 29, 1997, by and between Dover Massachusetts and CE Holman LLP, filed with the Companys
Registration Statement on Form S-1 on August 26, 2005 as Exhibit 10.6 Certifications31.1
    
    Certification of Principal Executive Officer of Periodic Report Pursuant to Rule 13a-14(a) or Rule 15d-14(a)31.2
    
    Certification of Principal Financial Officer of Periodic Report Pursuant to Rule 13a-14(a) or Rule 15d-14(a)32.1
    
    Certification by Chief Executive Officer and Chief Financial Officer of Periodic Report Pursuant to 18 U.S.C. Section 1350




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##### Table of Contents



SIGNATURES
  DOVER SADDLERY, INC.Dated: November 13, 2006
    
    By:
    
    /s/ Michael W. BrunsMichael W. Bruns, Chief Financial Officer(Principal Financial Officer and Duly Authorized Officer)




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##### Table of Contents



DOVER SADDLERY, INC. AND SUBSIDIARIES
 FORM 10-Q
 FOR THE QUARTER ENDED SEPTEMBER 30, 2006
 EXHIBIT INDEX
 *1.1
    
    Form of Underwriting Agreement*3.1
    
    Amended and Restated Certificate of Incorporation of the Company*3.2
    
    Certificate of Amendment to Certificate of Incorporation of the Company*3.3
    
    Second Amended and Restated Certificate of Incorporation of the Company to be filed upon completion of this offering*3.4
    
    By-laws of the Company*3.5
    
    Amended and Restated By-laws of the Company to be effective upon completion of this offering*4.1
    
    Shareholders Agreement, dated as of
September 17, 1998, by and among the Company, Stephen L. Day, Jonathan A.R. Grylls, David Post, Donald Motsenbocker, Thomas Gaines, David J. Powers, James F. Powers, and Michele R. Powers*4.2
    
    First Amendment to Shareholders
Agreement, dated as of August 29, 2003, by and among the Company, Stephen L. Day, Jonathan A.R. Grylls, David Post, Thomas Gaines, David J. Powers, James F. Powers, and Michele R. Powers*4.3
    
    Second Amendment to Shareholders
Agreement, dated as of August 25, 2005, by and among a majority in interest of the Purchasers (as defined therein) and a majority in interest of the Sellers (as defined therein)*4.4
    
    Instrument of accession, dated as of September 16, 2005, signed by Citizens Ventures, Inc. and accepted by the
Company, to that certain Shareholders Agreement, dated as of
September 17, 1998, by and among the Company and the Shareholders referenced therein, as amended*4.5
    
    Form of Common Stock Certificate*4.6
    
    Warrant to purchase common stock of the Company issued to Patriot Capital Funding, Inc.*4.7
    
    Amended and Restated 11.50% Senior
Secured Subordinated Note, dated September 16, 2005, issued jointly by the Company, Dover Massachusetts and Smith Brothers, Inc. to Patriot Capital Funding, LLC I*5.1
    
    Opinion of Bingham McCutchen LLP*5.2
    
    Opinion of Preti Flaherty Beliveau Pachios & Haley LLP
 
 *10.1
    
    1999 Stock Option Plan (the 1999 Plan)*10.2
    
    Form of Stock Option Agreement under the 1999 Plan*10.3
    
    2005 Equity Incentive Plan (the 2005 Plan)*10.4
    
    Form of Stock Option Agreement under the 2005 Plan*10.5
    
    Form of Restricted Stock Award Agreement under the 2005 Plan*10.6
    
    Lease, dated as of May 29, 1997, by and between Dover Massachusetts and CE Holman, LLP*10.7
    
    Lease, dated as of October 12, 2001, by and between David F. Post and Dover Massachusetts*10.8
    
    Lease, dated as of March 1, 2003, by and between Smith Brothers, Inc. and JDS Properties, LLC*10.9
    
    Letter dated February 9, 2005 from the Company to JDS Properties, LLC regarding lease extension*10.10
    
    Lease, dated as of June 22, 2002, by and between Hockessin Square, L.L.C. and Dover Massachusetts*10.11
    
    Letter dated January 25, 2005 from the Company to Hockessin Square, L.L.C. regarding lease extension*10.12
    
    Lease, dated as of November 24, 2003, by and between North Conway Holdings, Inc. and Dover
Massachusetts*10.13
    
    Stock Purchase Agreement, dated as of August 14, 1998, by and among the Company, James F. Powers,
David J. Powers and Michele R. Powers*10.14
    
    First Amendment to Stock Purchase Agreement, dated as of August 14, 1998, by and among the Company,
James F. Powers, David J. Powers and Michele R. Powers*10.15
    
    Amendment to Stock Purchase Agreement, dated as of September 17, 1998, by and among the Company,
James F. Powers, David J. Powers and Michele R. Powers*10.16
    
    Amended and Restated Loan Agreement, dated as of December 11, 2003, by and between Dover
Massachusetts and Fleet National Bank*10.17
    
    Amendment to Loan Agreement, dated as of December 11, 2003, by and between Dover Massachusetts and
Fleet National Bank*10.18
    
    Amended and Restated Security Agreement, dated as of December 11, 2003, by and between Dover
Massachusetts and Fleet National Bank




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##### Table of Contents



*10.19
    
    Amended and Restated Pledge Agreement, dated as of December 11, 2003, by and between the Company
and Fleet National Bank*10.20
    
    Shareholder Pledge Agreement, dated as of September 17, 1998, by and among Stephen L. Day, Jonathan
A.R. Grylls, David J. Powers, James F. Powers, Michele R. Powers and BankBoston, N.A.*10.21
    
    Amended and Restated Revolving Credit Note, dated as of December 11, 2003, by Dover Massachusetts
for the benefit of Fleet National Bank*10.22
    
    Letter agreement, dated as of September 16, 2005, by and between Dover Massachusetts and Bank of
America, N.A. (successor by merger to Fleet National Bank)*10.23
    
    Security Agreement, dated as of December 11, 2003, by and between Smith Brothers, Inc. and Fleet
National Bank*10.24
    
    Guaranty, dated as of December 11, 2003, by Smith Brothers, Inc. to Fleet National Bank*10.25
    
    Redemption Agreement, dated as of August 25, 2005, by and between the Company and Citizens
Ventures, Inc.*10.26
    
    Letter agreement, dated as of September 14, 2005, by and between the Company and Citizens Ventures,
Inc., amending that certain Redemption Agreement, dated as of August 26, 2005, by and between the
Company and Citizens Ventures, Inc.*10.27
    
    License Agreement, dated as of February 10, 2003, by and between Weatherbeeta PTY LTD and the
Company




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##### Table of Contents



Number
    
    Description*10.28
    
    Settlement Agreement, dated as of December 22, 2003, by and between Libertyville Saddle Shop, Inc.
and the Company*10.29
    
    Employment Agreement, dated as of September 1, 2005, by and between Stephen L. Day and the Company*10.30
    
    Employment Agreement, dated as of September 1, 2005, by and between Jonathan A.R. Grylls and the
Company*10.31
    
    Amended and Restated Subordination Agreement, dated as of September 16, 2005, by and among Bank of
America, N.A. (successor by merger to Fleet National Bank), Patriot Capital Funding, Inc.
(successor in interest to Wilton Funding, LLC) and Dover Massachusetts, acknowledged by the
Company and Smith Brothers, Inc.*10.32
    
    Amended and Restated Senior Subordinated Note and Warrant Purchase Agreement, dated as of
September 16, 2005, by and among the Company, Dover Massachusetts, Smith Brothers, Inc., Patriot
Capital Funding, Inc. and the Purchasers referenced therein*10.33
    
    Amended and Restated Security Agreement, dated as of September 16, 2005, by and among the Company,
Dover Massachusetts, Smith Brothers, Inc. and Patriot Capital Funding, Inc.#10.34(1)
    
    Amendment No. 1 to the Employment Agreement dated as of September 1, 2005 with Stephen L. Day#10.35(2)
    
    Amendment No. 1 to the Employment Agreement dated as of September 1, 2005 with Jonathan A.R. Grylls#10.36(4)
    
    Second Amendment dated as of March 28, 2006 to Amended and Restated Loan Agreement with Bank of
America.#10.37(5)
    
    Amendment No. 1 dated as of March 28, 2006 to Amended and Restated Senior Subordinated Note and
Warrant Purchase Agreement with Patriot Capital Funding, Inc.^^10.38
    
    Agreement of Lease dated March 29, 2006 by and between the Company and Sparks Lot Seven, LLC++10.39
    
    Commercial Lease executed as of March 9, 2001 between Marvid Crabyl, LLC and Dover Saddlery, Inc.,
as amended and extended.++10.40
    
    Stock Purchase Agreement dated as of May 19, 2006 among Dover Saddlery, Inc., Dover Saddlery
Retail, Inc., Old Dominion Enterprises, Inc. and Reynolds Young, as amended++10.41
    
    Lease made as of June, 2006 between Humphrey and Rodgers and Dover Saddlery Retail, Inc.++10.42
    
    Agreement of Lease for Shopping Center Space between Sequel Investors Limited Partnership and Old
Dominion Enterprises, Inc. Dated as of May 20, 1997, as amended.++10.43
    
    LBs of Virginia Building Lease Agreement dated November 1, 2000, as amended.++10.44
    
    Lease agreement made July 10, 2006 between Hopkins Roads Associates and Dover Saddlery Retail, Inc.++10.45(6)
    
    Consent and Amendment No. 2, dated June 29, 2006, to Amended and Restated Senior Subordinated Note
and Warrant Purchase Agreement with Patriot Capital Funding, Inc.++10.46(7)
    
    Waiver letter dated as of June 27, 2006 between Bank of America, N.A. and Dover Saddlery, Inc.^10.47(8)
    
    First Amendment and Extension to Lease Agreement dated September 2006 between C.E. Holman Limited
Partnership and Dover Saddlery, Inc.#14.1(3)
    
    Code of Business Conduct and Ethics++21.1
    
    Subsidiaries of the Company*23.1
    
    Consent of Bingham McCutchen LLP (included in Exhibit 5.1)**23.2
    
    Consent of Ernst & Young LLP*23.3
    
    Consent of Preti Flaherty Beliveau Pachios & Haley PLLC (included in Exhibit 5.2)*24.1
    
    Power of Attorney^31.1
    
    Certification of Principal Executive Officer of Periodic Report Pursuant to Rule 13a-14(a) or Rule
15d-14(a)^31.2
    
    Certification of Principal Financial Officer of Periodic Report Pursuant to Rule 13a-14(a) or Rule
15d-14(a)^32.1
    
    Certification by Chief Executive Officer and Chief Financial Officer of Periodic Report Pursuant
to 18 U.S.C. Section 1350*99.1
    
    Consent of William F. Meagher, Jr.
 
 ^
    
    Filed herewith++
    
    Filed with the Companys Quarterly Report on Form 10Q for the Fiscal Quarter Ending June 30, 2006, on August 14, 2006.^^
    
    Filed with the Companys Quarterly Report on Form 10Q for the Fiscal Quarter Ending March 31, 2006, on May 15, 2006.*
    
    Incorporated by reference herein to the exhibits to the Companys Registration Statement on Form S-1 (File No. 333-127888)**
    
    Incorporated by reference to the exhibit to the Companys Registration Statement on Form S-8 on April 3, 2006#
    
    Filed with the Companys Annual Report on Form 10-K for the Fiscal Year Ending December 31, 2005, on March 30, 2006
    
    Indicates a management contract or compensatory plan or arrangement(1)
    
    Amends Employment Agreement filed with the Companys Registration Statement on Form S-1 on August 26, 2005 as




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##### Table of Contents



Exhibit 10.30(2)
    
    Amends Employment Agreement filed with the Companys Registration Statement on Form S-1 on August 26, 2005 as Exhibit 10.31(3)
    
    Amends and restates Code of Conduct and Ethics filed with the Companys Registration Statement on Form S-1/ A on October
2, 2005 as Exhibit 14.1(4)
    
    Amends Amended and Restated Loan Agreement dated as of December 11, 2003, with Fleet National Bank, filed with the
Companys Registration Statement on Form S-1 on August 26, 2005 as Exhibit 10.16(5)
    
    Amends Amended and Restated Senior Subordinated Note and Warrant Purchase Agreement dated as of September 16, 2005, with
Patriot Capital Funding, Inc., filed with the Companys Registration Statement on Form S-1/A on October 5, 2005 as Exhibit
10.32.(6)
    
    Amends Amended and Restated Senior Subordinated Note and Warrant Purchase Agreement dated as of September 16, 2005, with
Patriot Capital Funding, Inc., filed with the Companys Registration Statement on Form S-1/A on October 5, 2005 as Exhibit
10.32.(7)
    
    Pertains to Amended and Restated Loan Agreement dated as of December 11, 2003, with Fleet National Bank, filed with the
Companys Registration Statement on Form S-1 on August 26, 2005 as Exhibit 10.16.(8)
    
    Amends Lease, dated as of May 29, 1997, by and between Dover Massachusetts and CE Holman LLP, filed with the Companys
Registration Statement on Form S-1 on August 26, 2005 as Exhibit 10.6 Certifications:
 31.1
    
    Certification of Principal Executive Officer of Periodic Report Pursuant to Rule 13a-14(a) or Rule 15d-14(a)31.2
    
    Certification of Principal Financial Officer of Periodic Report Pursuant to Rule 13a-14(a) or Rule 15d-14(a)32.1
    
    Certification by Chief Executive Officer and Chief Financial Officer of Periodic Report Pursuant to 18 U.S.C. Section 1350