West Marine Reports 49% Increase In 2011 Pre-Tax Earnings And Provides 2012 Guidance

West Marine, Inc. (Nasdaq: WMAR) today released unaudited financial results for the fourth quarter and fiscal year ended December 31, 2011.

Fiscal Year 2011 Highlights:

• Pre-tax income was $21.2 million, a $7.0 million, or 49.0%, increase compared to last year.
• Net income was $29.7 million, or $1.27 per fully diluted share, compared to $13.2 million, or $0.57 per fully diluted share, last year, a 124.3% increase, reflecting a significant tax benefit from the valuation allowance release during the year.
• Net revenues for the fiscal year ended December 31, 2011 were $643.4 million, a $20.6 million or 3.3% increase over last year.
• At year–end, we were debt free.
• Year-end cash balance was nearly double that of last year at $44.0 million.
• Inventory per square foot decreased by 4.9% versus last year.
• Operating cash flow increased by 49.6% to $37.2 million.

Geoff Eisenberg, West Marine’s CEO, commented: “Our strong results for 2011 reflect continued progress in executing our focused strategies to drive higher sales and profit and position us very well for 2012. Due to the success of our many initiatives, from our new store formats to our new merchandise assortments, we have a great deal of optimism about our future.”

Fiscal 2011 results

Pre-tax income for fiscal year 2011 was $21.2 million, 49.0% higher than pre-tax income of $14.2 million in fiscal year 2010, which ended January 1, 2011. Net income for the year was $29.7 million, or $1.27 per diluted share. This was an improvement of $16.5 million compared to net income in 2010 of $13.2 million, or $0.57 per diluted share.

Net revenues for the fiscal year 2011 were $643.4 million, a 3.3% increase over net revenues of $622.8 million for the fiscal year 2010. Comparable store sales increased 2.3% versus last year. The primary driver of growth was increased sales to our Port Supply (wholesale) customers through our store locations as part of our ongoing efforts to better serve this group and to leverage our store facilities. Real estate activity connected with our real estate optimization strategy drove a net $8.9 million increase in net revenues as stores opened during the fourth quarter of 2010 and during 2011 generated $39.9 million in net revenues, whereas stores closed during these same periods effectively reduced net revenues by $31.0 million. The majority of the closures were a result of our ongoing strategy to evolve into having fewer, larger stores.

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