West Marine reports 2014 results, gives 2015 outlook

WATSONVILLE, Calif. — West Marine, Inc. (Nasdaq:WMAR) today reported unaudited financial results for the fourth quarter and fiscal year ended January 3, 2015. Fiscal 2014 was a 53-week year for the company and both the full year and fourth quarter benefitted from the additional week.

• Net revenues for the 53-week period increased 1.9% compared to the 52-week period last year and net revenues for the fourth quarter increased 8.9% compared to the 13-week period in the prior year.
• Pre-tax income was $4.0 million and earnings before interest, taxes, depreciation and amortization (“EBITDA”) was$22.6 million, compared to pre-tax income of $15.3 million and EBITDA of $30.7 million last year.
• Net income and earnings per share were $1.9 million and $0.08, respectively, compared to net income of $7.8 millionand $0.32 earnings per share last year. Excluding a $0.8 million tax valuation allowance, net income was $2.8 million, or $0.11 per share.
• Excluding the impact of the 53^rd week, comparable store sales increased by 0.1% for the year and by 2.8% for the fourth quarter.
• The company remained debt-free at year-end and had $101.1 million available on its revolving credit line at the end of the fiscal year.

Matt Hyde, West Marine’s CEO, commented: “We’re pleased with our strong fourth quarter results. From increased comp store sales to a strong holiday response, our key growth strategies delivered solid top line growth. We are optimistic that these strategic initiatives, combined with a strengthening boating industry, will give us good momentum as we start this year’s boating season.”

Progress on our growth strategies year-to-date was as follows:

• eCommerce: Sales from our eCommerce website were up by 1.4%, as compared to last year, and represented 7.7% of total sales, compared to 7.6% for the same period last year. Overall our eCommerce results this year were negatively affected by the replatform of our website earlier in the year. However, with the replatform behind us, our eCommerce sales returned to positive year-over-year growth in mid-July and continued to improve throughout the remainder of the fiscal year. We remain committed to our goal for eCommerce to represent 15% of total sales by 2019.
• Store optimization: Sales through our optimized stores, markets where we have consolidated or revitalized stores to improve the shopping experience for our customers, increased to 42.4% of total sales compared to 35.0% last year. This year-over-year increase supports our goal to deliver 50% of our total sales through optimized stores by 2019.
• Merchandise expansion: Sales in these product lines, which include footwear, apparel, clothing accessories, fishing products and paddle sports equipment, were up by 14.1%, with core product sales down 1.7%, compared to last year.