West Marine, Inc. saw net sales for the first quarter ending March 29, 2008 total $113.3 million, decreasing 9.9% from net sales of $125.8 million last year. Comparable store sales decreased 9.4% compared to the year-ago quarter. Pre-tax net loss for the thirteen weeks ended March 29, 2008 was $25.4 million, or 81 cents per share after-tax, compared to a pre-tax loss of $18.4 million, or 53 cents per share after-tax last year. The company's net loss for the quarter was $17.7 million, expanding from a year-ago loss of $11.4 million.


Gross profit for the thirteen weeks ended March 29, 2008 was $22.5 million, a decrease of $4.6 million compared to the same period last year. Gross profit as a percentage of net sales was 19.9%, a decrease of 160 basis points compared to 21.5% last year. Due to their relatively fixed nature, occupancy expenses as a percentage of net sales increased by almost 200 basis points on the declining sales, driving this reduction in gross profit percentage. Product margins improved slightly year-over-year.


Selling, general and administrative expense for the thirteen weeks ended March 29, 2008 was $46.8 million, an increase of $2.8 million compared to $44.1 million for the same period last year. The increase primarily was attributable to expenses associated with the ongoing SEC investigation of $1.6 million, higher marketing expenditures of $0.9 million which reflected a change in timing, and foreign exchange losses with an impact of $0.6 million. For the first quarter of 2008, selling, general and administrative expense as a percentage of net sales was 41.4% compared to 35.0% last year. Interest expense was $0.8 million for the first quarter of 2008, down from $1.4 million last year due to reduced debt levels and lower interest rates.


As of March 29, 2008, long-term debt was $89.0 million, which is down $6.6 million, or 6.9%, from this time last year, and is down 40.0% from the same period two years ago.


Geoff Eisenberg, CEO of West Marine, commented, “Our operating results were mostly in line with our internal expectations, reflective of market softness and weak sales previously announced for the first quarter. While we’ve always experienced a loss in the first quarter, we have taken significant steps to ensure that West Marine remains very strong financially during this current industry downturn. We believe that our present inventory position, our reduced capital spending plan, and our roughly $100 million credit availability will allow us to make appropriate strategic investments and weather current market challenges.


The boating season in North America is just starting to move into high gear, and while we don’t see a dramatic turnaround in customer activity, we are pleased to see a recent slight improvement in sales compared to first quarter results. We remain cautiously optimistic and believe excellent execution of our key strategic initiatives will position West Marine very well for the future.”















































































































































































































































































































West Marine, Inc.        
Condensed Consolidated Statements of Operations
(Unaudited and in thousands, except per share amounts)
 
13 Weeks Ended
As Restated (1)
March 29, 2008 March 31, 2007
Net sales $ 113,263 100.0 % $ 125,783 100.0 %
Cost of goods sold   90,778   80.1 %   98,693   78.5 %
Gross profit 22,485 19.9 % 27,090 21.5 %
Selling, general and administrative expense 46,821 41.4 % 44,055 35.0 %
Impairment of long-lived assets   266   0.2 %   0   0.0 %
Loss from operations (24,602 ) -21.7 % (16,965 ) -13.5 %
Interest expense   846   0.8 %   1,423   1.1 %
Loss before income taxes (25,448 ) -22.5 % (18,388 ) -14.6 %
Benefit from income taxes   (7,787 ) -6.9 %   (7,036 ) -5.6 %
Net loss $ (17,661 ) -15.6 % $ (11,352 ) -9.0 %
 
Net loss per common and common equivalent share – basic and diluted
$ (0.81 ) $ (0.53 )
 
Weighted average common and common equivalent shares outstanding – basic and diluted
21,894 21,596
 

(1) Amounts for the first quarter of 2007 reflect the restatement adjustments previously discussed in our Annual Report on Form 10-K


for the year ended December 29, 2007. Such corrections and related disclosures will be included in our Form 10-Q for the thirteen weeks ended March 29, 2008 expected to be filed on or before May 8, 2008.