West Marine reports improved Q1 operating results

WATSONVILLE, Calif. — Pre-tax operating results at West Marine, Inc., improved by $11.0 million compared to the same period last year, the company reported today. The gain represents the company's best first quarter pre-tax operating results since 2005, the company said.

“We are pleased to report these considerably improved operating results, despite a sales decline which reflects market and industry conditions," Geoff Eisenberg, CEO of West Marine, said in a statement. "While we’ve always experienced a loss in the first quarter due to seasonality in our business, this quarter’s operating results reflect changes we have made to strengthen the company in the face of current economic conditions.”

Earlier this month, West Marine reported a 10.9 percent drop in its first quarter revenues from a year ago. The first quarter covers the thirteen weeks that ended April 4.

The company said cash from operating activities improved by $4.9 million versus last year, long-term debt was down $13.2 million, or 14.8 percent, and the company maintains unused credit facility availability of more than $86 million.

Pre-tax loss for the first quarter was $14.4 million, an $11.0 million improvement compared to last year.

As a percentage of net revenues, gross profit increased by 2.7 percent. The company said the increase resulted from better product margins due to a reduction in promotional and clearance activity, and a shift in sales mix to higher margin product categories.

Selling, general and administrative (SG&A) expenses were $36.9 million, a decrease of $9.9 million. Savings included a $7.4 million reduction in payroll, marketing and other variable expenses, reflecting lower revenues, reduced store count and lower professional services expenses; and a $1.6 million reduction in costs related to an SEC investigation.

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