1071625--3/30/2006--DOVER_SADDLERY

related topics

{customer, product, revenue}

{condition, economic, financial}

{property, intellectual, protect}

{acquisition, growth, future}

{system, service, information}

{operation, international, foreign}

{cost, operation, labor}

{operation, natural, condition}

{personnel, key, retain}

{debt, indebtedness, cash}

{regulation, change, law}

{product, market, service}

Our retail store rollout could cannibalize existing sales from our direct sales channel or existing retail locations. With a significant portion of our growth strategy dependent upon our planned retail store expansion, our quarterly revenues and earnings could be variable and unpredictable and inventory levels will increase. We rely on service providers to operate our business and any disruption of their supply of services could have an adverse impact on our revenues and profitability. We rely on merchandise suppliers to operate our business and any disruption of their supply of products could have an adverse impact on our revenues and profitability. If we do not properly manage our inventory levels, our operating results and available funds for future growth will be adversely affected. If our information technology systems fail to perform as designed or if we need to make system changes in order to support our growing direct and retail store businesses, there may be disruptions in operations. A decline in discretionary consumer spending could reduce our revenues. Our results may fluctuate as a result of seasonal changes associated with the equestrian products industry. Competition in the equestrian products market could reduce our revenue and profitability. A natural disaster or other disruption at our Littleton, MA warehouse fulfillment center could cause us to lose merchandise and be unable to deliver products to our direct sales customers and our retail stores. If we lose key members of management or are unable to retain the talent required for our business, our operating results could suffer. We may need additional financing to execute our growth strategy, which may not be available on favorable terms or at all, which could increase our costs, limit our ability to grow and dilute the ownership interests of existing shareholders. The terms of our revolving credit facility impose operating and financial restrictions on us, which may impair our ability to grow our business or respond to changing business and economic conditions and could have an adverse impact on our business. We rely on foreign sources for many of our products, which subjects us to various risks. Our retail store expansion strategy may result in our direct sales business establishing a nexus with additional states, which may cause our direct sales business to pay additional income and sales taxes and have an adverse effect on the revenues and cash flows of our direct sales business. If we fail to adequately protect our trademarks, our brand and reputation could be impaired or diluted and we could lose customers. We may have disputes with, or be sued by, third parties for infringement or misappropriation of their proprietary rights, which could have a negative impact on our business. We are subject to numerous regulations and regulatory changes that could impact our business or require us to modify our current business practices.

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1071625--3/30/2006--DOVER_SADDLERY_INC