West Marine, Inc. posted a 42% jump in net income for the second quarter to $20.1 million, or 92 cents per share, from $14.2 million, or 66 cents per share, for the same period last year. Net income for the second quarter last year included a $3.5 million pre-tax, or 9 cents per share after tax, non-cash asset impairment charge. Net sales for the quarter were $247.8 million, a decrease of 6.3% from net sales of $264.5 million for the same period a year ago. West Marine operated 380 stores during the second quarter of 2007, compared to 410 stores during the second quarter of 2006. Comparable store sales decreased 2.9% for the thirteen weeks ended June 30, 2007.


Net income for the twenty-six weeks ended June 30, 2007 was $8.9 million, or $0.40 per share, compared to net income of $2.3 million, or $0.11 per share, for the same period last year, including a $3.5 million pre-tax, or $0.09 per share after-tax, non-cash asset impairment charge. Net sales for the twenty-six weeks ended June 30, 2007 were $373.8 million, a decrease of 5.9% from net sales of $397.2 million for the same period a year ago. Comparable store sales decreased 2.8% for the twenty-six weeks ended June 30, 2007.

Peter Harris, West Marine's chief executive officer, stated, “The positive earnings progress this year is a direct result of last year's expense restructuring actions, as well as operating disciplines applied this year. Inventory management, yielding increased productivity while maintaining record assortment levels in stores, has combined with earnings growth to produce continued strong operating cash flow. The second quarter is our most significant revenue and profit period and, amidst the continuing industry retail sales weakness, we are encouraged by progress being made in our financial fundamentals. West Marine remains well-positioned for the future with great people, a solid market presence, and the resources and commitment to serve the boating customer.”


West Marine, Inc.

Condensed Consolidated Statements of Income

(Unaudited and in thousands, except per share data)


                                       13 Weeks Ended  13 Weeks Ended

                                        June 30, 2007   July 1, 2006

                                       ————— —————

Net sales                              $247,770 100.0% $264,547 100.0%

Cost of goods sold                      161,692  65.3%  174,778  66.1%

                                       ————— —————

   Gross profit                          86,078  34.7%   89,769  33.9%

Selling, general and administrative

 expense                                 52,237  21.0%   59,904  22.6%

Store closures and other restructuring

 costs                                        0   0.0%    3,532   1.3%

                                       ————— —————

   Income from operations                33,841  13.7%   26,333  10.0%

Interest expense                          1,273   0.6%    2,210   0.9%

                                       ————— —————

   Income before taxes                   32,568  13.1%   24,123   9.1%

Income taxes                             12,439   5.0%    9,926   3.7%

                                       ————— —————

   Net income                          $ 20,129   8.1% $ 14,197   5.4%

                                       =============== ===============


Net income per common and common

 equivalent share:

   Basic                               $   0.93        $   0.67

   Diluted                             $   0.92        $   0.66


Weighted average common and common

 equivalent shares outstanding:

   Basic                                 21,754          21,298

   Diluted                               21,923          21,527