West Marine 2002 Profits Jump 36% on 3.5% Sales Gain

West Marine, Inc. reported net income for the year ended December 28, 2002 of $18.9 million, an increase of 35.9% compared to net income of $13.9 million in 2001. Earnings per share for 2002 were $0.97, compared to earnings per share of $0.77 for 2001. Net sales for 2002 were $530.6 million, an increase of 3.5% from $512.9 million in 2001. Comparable store net sales increased 0.9% from 2001.

The Company’s net loss for the thirteen weeks ended December 28, 2002 was ($1.4 million) or ($0.07) per share, a decrease in net loss of 30.8% compared to a loss of ($2.0 million) or ($0.11) per share for the same period last year. Net sales for the thirteen weeks ended December 28, 2002 were $92.7 million, an increase of 2.0% from sales of $90.8 million for the same period a year ago. Comparable store net sales for the thirteen weeks decreased by 3.2% compared to the same period a year ago.

John Edmondson, West Marine’s chief executive officer, stated, “We are very pleased with our fourth quarter results. Our fourth quarter loss of ($0.07) per share bested the analysts consensus estimate of ($0.08) per share, as well as last year’s loss of ($0.11) per share for the period.

“The El Nino effect impacted our sales the last part of the fourth quarter and continues in the first quarter this year. We estimate comparable store sales for February to be negative, ranging from -6% to -9%. However, our gross margin continues to improve. In addition, our integration of the BoatU.S. stores is proceeding ahead of schedule. We anticipate that we will be finished with our integration process by March 15, 2003.”

West Marine, Inc.
Condensed Consolidated Statements of Operations
For the Thirteen Weeks Ended December 28, 2002 and December 29, 2001
(Unaudited, in thousands except per share amounts)

                                         13 Weeks         13 Weeks
                                       Dec. 28, 2002    Dec. 29, 2001
                                     ----------------- ---------------
Net sales                             $92,665  100.0%  $90,833  100.0%
Cost of goods sold, including buying
 and occupancy                         65,901   71.1%   66,137   72.8%
                                     ----------------- ---------------
          Gross profit                 26,764   28.9%   24,696   27.2%
Selling, general and administrative
 expenses                              28,333   30.6%   27,105   29.9%
                                     ----------------- ---------------
          Loss from operations         (1,569)  -1.7%   (2,409)  -2.7%
Interest expense                          730    0.8%      941    1.0%
                                     ----------------- ---------------
          Loss before income taxes     (2,299)  -2.5%   (3,350)  -3.7%
Income tax benefit                       (908)  -1.0%   (1,341)  -1.5%
                                     ----------------- ---------------
             Net loss                 $(1,391)  -1.5%  $(2,009)  -2.2%
                                     ================ ================


West Marine, Inc.
Condensed Consolidated Statements of Income
For the Fifty-Two Weeks Ended December 28, 2002 and December 29, 2001
(Unaudited, in thousands except per share amounts)

                                      52 Weeks Ended   52 Weeks Ended
                                       Dec. 28, 2002    Dec. 29, 2001
                                     ---------------- ----------------
Net sales                            $530,588  100.0% $512,873  100.0%
Cost of goods sold, including buying
 and occupancy                        367,688   69.3%  363,578   70.9%
                                     ---------------- ----------------
          Gross profit                162,900   30.7%  149,295   29.1%
Selling, general and administrative
 expenses                             128,087   24.1%  121,256   23.6%
                                     ---------------- ----------------
          Income from operations       34,813    6.6%   28,039    5.5%
Interest expense                        3,560    0.7%    4,846    1.0%
                                     ---------------- ----------------
          Income before income taxes   31,253    5.9%   23,193    4.5%
Income taxes                           12,345    2.3%    9,276    1.8%
                                     ---------------- ----------------
             Net income               $18,908    3.6%  $13,917    2.7%