West Marine reports improved 2014 revenues, announces CFO transition

WATSONVILLE, Calif. -- West Marine, Inc. announced certain preliminary and unaudited financial results and updated earnings guidance for its fiscal year ended January 3, 2015, or fiscal 2014, and the resignation of its Chief Financial Officer.

Fiscal 2014 Guidance Update

Total revenues for fiscal 2014 are expected to be approximately $676 million, within the range of previously-issued guidance of $665 million to $680 million. Fiscal 2014 was a 53-week year and included an extra week in the fourth quarter. Comparable store sales for the year are expected to be +1.2% versus our prior guidance of -1.0% to +1.5%. The company anticipates comparable store sales for the fourth quarter to be approximately +8.7%, and both the full year and fourth quarter benefitted from the additional week included in fiscal 2014.

EBITDA for fiscal 2014 is now expected to be approximately $22 million to $23 million versus previously-issued guidance of$27.5 million to $30.0 million, and pre-tax profit is expected to be approximately $3.5 million to $4.5 million compared to our prior guidance of $8.5 million to $11.0 million.

The results discussed above are preliminary and unaudited and are subject to change based on the completion of the company's normal quarter and year-end review process and the audit of our financial statements by our independent registered public accounting firm. As a result, these preliminary results may be different from the actual results that will be reflected in West Marine's audited consolidated financial statements for the year ended January 3, 2015 when they are released.

Matt Hyde, West Marine's CEO, commented: "We are very pleased with the progress we made in the fourth quarter in delivering sales growth resulting from our efforts to drive the holiday business through our expanded assortment, increased holiday marketing efforts and improved shopping experience in stores and on the web where the preliminary numbers of our domestic eCommerce business reflect growth of 16.3% compared to last year.  On a like-calendar basis, our comparable store sales for the year are expected to grow by about 0.1%, highlighted by an increase of approximately 2.8% for the fourth quarter and a 6.4% increase in December.

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However, our fourth quarter earnings will include costs that exceeded our forecasts, such as: higher employee benefits expense, including healthcare claims; increased share-based compensation expense due to the unanticipated increase in our stock price late in the year; and higher-than-expected unit buying and distribution costs due to bringing in additional inventory to protect early-season sales growth and to bolster our core boat product sales in our traditional stores."

CFO Transition

On January 16, 2015, the company's Board of Directors accepted the resignation of Thomas R. Moran from his position as Executive Vice President, Chief Financial Officer and Assistant Secretary. His departure does not result from any disagreement with the company's Board of Directors or management on any matter relating to its operations, policies or accounting practices. Mr. Moran will remain with the company through January 30, 2015 to support an orderly transition.

"On behalf of the management team and our Board of Directors, I thank Tom for his hard work and many contributions over his 8 years of service to the company. Tom has helped position us to continue to execute on our growth strategies, and he leaves a strong finance team that can oversee and steward West Marine. We all wish the best for Tom," said Matt Hyde.

On January 16, 2015, the Board also appointed Deborah Ajeska, West Marine's Divisional Vice President and Controller, as the company's Principal Financial Officer. In this new capacity, Ms. Ajeska will perform Mr. Moran's duties until a new CFO is appointed. Ms. Ajeska, a 15 year veteran of the finance team, joined the company in May of 1999 as its Director of Financial Planning & Analysis, was promoted to Assistant Vice President of Financial Planning & Analysis in 2007, then to Assistant Vice President-Operations, Controller in 2008 and finally to her current position in late 2010.

The company intends to conduct a search to recruit a new CFO.

Webcast and Conference Call

West Marine will host a conference call to discuss the information included in this press release on January 29, 2015, at 1:00 p.m. Eastern Time. The conference call will be simultaneously webcast live over the Internet at www.westmarine.com on the "Investor Relations" page. Please allow extra time prior to the call to visit the site and download the streaming media software required to listen to the Internet broadcast.

The call is available by dialing (888) 756-1546 in the U.S. and Canada and (706) 634-1041 for international callers. Please be prepared to give the conference ID number 71933441. An audio replay of the call will be available January 29, 2015 at 4:00 p.m. Eastern Time through February 5, 2015 at 11:59 p.m. Eastern Time. The replay number is (855) 859-2056 in the U.S. and Canada and (404) 537-3406 for international callers. The access code is 71933441.

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