WATSONVILLE, Calif.--(Business Wire)--West Marine, Inc. (Nasdaq:WMAR) today reported net sales for the
thirteen weeks ended December 29, 2007 of $117.8 million, a decrease
of $6.0 million, or 4.9%, from net sales of $123.8 million a year ago,
primarily due to a $4.2 million decrease in sales attributable to
closed stores and a $2.9 million decrease in comparable store sales.
Comparable store sales for the fourth quarter decreased 3.0%.
Net sales for the fifty-two weeks ended December 29, 2007 were
$679.1 million, a decrease of $37.5 million, or 5.2%, from net sales
of $716.6 million a year ago, primarily due to a $28.6 million sales
decrease attributable to closed stores and a $11.4 million decrease in
comparable store sales. Comparable store sales for fiscal year 2007 do
not include net sales of $6.1 million from new stores and $6.8 million
from stores remodeled or expanded during the year. Comparable store
sales for 2007 decreased 1.9%.
Net sales in the Stores segment for fiscal year 2007 were $593.8
million, a decrease of $36.1 million, or 5.7%, compared to fiscal year
2006. The sales decrease primarily was due to a $23.1 million decrease
attributable to closed stores and a $11.4 million decrease in
comparable store sales. Port Supply (wholesale) segment sales through
the distribution centers for 2007 were $41.6 million, a decrease of
$2.0 million, or 4.5%, compared to 2006. Port Supply sales to
wholesale customers through store locations are included in the Stores
segment. Net sales in the Direct Sales segment for 2007 were $43.8
million, an increase of $0.6 million, or 1.3%, compared to 2006.
Geoff Eisenberg, Chief Executive Officer of West Marine, said,
"Overall sales levels in the fourth quarter were modestly below our
expectations. In particular, the southeast has remained soft,
continuing the trends we have seen for most of the year. Weakness in
several core merchandise categories was partly offset by strength in
electronics, which reflected increased promotional activity as we
responded to marketplace conditions."
West Marine also reported certain significant events expected to
impact fourth quarter and fiscal year 2007 results, as follows:
-- An updated assessment of goodwill in the fourth quarter, as
required by Statement of Financial Accounting Standards No.
142, is expected to result in a non-cash impairment charge in
the fourth quarter of approximately $56.9 million pre-tax, or
$2.31 per share after-tax. The after-tax, per share equivalent
of this impairment charge reflects the non-deductibility for
tax purposes of certain goodwill components;
-- Continued cooperation with the previously-announced SEC
informal inquiry is expected to result in expenditures that
exceed our previous fourth quarter estimate by approximately
$1.7 million pre-tax, or $0.05 per share after-tax;
-- The departure of our former Chief Executive Officer is
expected to result in related severance costs in the fourth
quarter of approximately $1.3 million pre-tax, or $0.04 per
share after-tax; and
-- Management's on-going evaluation of individual store
performance is expected to result in a non-cash asset
impairment charge in the fourth quarter of approximately $0.9
million pre-tax, or $0.03 per share after-tax.
In addition to these significant events, lower sales during the
fourth quarter are expected to result in operating earnings modestly
lower than our previous expectations for 2007.
WEBCAST AND CONFERENCE CALL
West Marine will hold a conference call on Thursday, January 10,
2008 at 8:30 AM Pacific Time to discuss fourth quarter 2007 sales
results and significant events. The live call will be webcast and
available in real time on the Internet at www.westmarine.com in the
"Investor Relations" section. The sales release will also be posted on
the Internet at www.westmarine.com in the "Press Releases" section on
the Investor Relations page. Please allow extra time prior to the call
to visit the site and download the streaming media software required
to listen to the Internet broadcast.
Interested parties can also connect to the conference call by
dialing (888) 756-1546 in the U.S. and Canada and (706) 634-1083 for
international calls. Please be prepared to give the conference ID
number 30260469. The call leader is Geoff Eisenberg, West Marine's
President and Chief Executive Officer.
An audio replay of the call will be available January 10, 2008 at
10:30 AM Pacific Time through January 17, 2008 at 8:59 PM Pacific
Time. The replay number is (800) 642-1687 in the U.S. and Canada and
(706) 645-9291 for international calls. The access code is 30260469.
ABOUT WEST MARINE
West Marine, the country's largest specialty retailer of boating
supplies and accessories, has 372 stores located in 38 states, Puerto
Rico and Canada. Our catalog and Internet channels offer customers
approximately 50,000 products and the convenience of exchanging
catalog and Internet purchases at our store locations. Our Port Supply
division is one of the country's largest wholesale distributors of
marine equipment serving boat manufacturers, marine services,
commercial vessel operators and government agencies. For more
information on West Marine's products and store locations, or to start
shopping, visit westmarine.com or call 1-800-BOATING (1-800-262-8464).
Special Note Regarding Forward-Looking Statements
This press release includes "forward-looking statements" within
the meaning of Section 21E of the Securities Exchange Act of 1934
including forward-looking statements concerning earnings expectations
and statements that are predictive or express expectations that depend
on future events or conditions that involve risks and uncertainties.
These forward-looking statements include, among other things,
statements that relate to West Marine's earnings expectations, as well
as facts and assumptions underlying these expectations. Actual results
may differ materially from the preliminary expectations expressed or
implied in these forward-looking statements due to various risks,
uncertainties or other factors, including management's further review
and refinement of fourth quarter and fiscal year 2007 results and
finalizing the valuation of the company's assets with our third-party
appraisal firm, as well as the audit being conducted by West Marine's
independent registered public accounting firm. Risk factors that may
affect our earnings in the future include those set forth in West
Marine's Form 10-K for the fiscal year ended December 30, 2006 as
updated in its Form 10-Q for the fiscal quarter ended September 29,
2007. Except as required by applicable law, West Marine assumes no
responsibility to update any forward-looking statements as a result of
new information, future events or otherwise.
West Marine, Inc.
Tom Moran, 831-761-4229
Senior Vice President and Chief Financial Officer
Deborah Ajeska, 831-761-4229
Assistant Vice President of Financial Planning & Analysis
Copyright Business Wire 2008
