West Marine, Inc. (NASDAQ:WMAR) today reported financial results
for the third quarter ended October 1, 2016. The company reported
net revenues of $191.9 million in the quarter, a decrease of 1.3%
compared to the same period last year. Comparable store sales
increased 0.2% year-over-year. Pre-tax income was $7.4 million,
compared to pre-tax income of $8.6 million last year in the same
period. Earnings per diluted share decreased 5 cents to 15 cents
per share.
Matt Hyde, CEO of West Marine, commented: “We are pleased that
our growth strategies are resulting in a 24% increase in eCommerce
sales and solid top-line gains in our Waterlife stores. At the same
time, we continue to make changes to our professional services
business to improve its long-term profitability. Despite the
challenging retail environment, we’ve increased comparable store
sales and product margins and remain on track to achieve a double
digit increase in pre-tax income for 2016.”
Further Progress on Growth Strategies
- Sales from eCommerce increased by 23.7% compared to the third
quarter of 2015 and represented 10.2% of total sales, compared to
8.2% for the same period last year, showing continued progress
towards the goal of 15% of total sales.
- Sales through Waterlife stores were 48.0% of total sales
compared to 44.0% last year. This year-over-year increase
demonstrates the company’s progress towards the goal to deliver 50%
of total sales. Waterlife stores have been optimized or revitalized
to offer a broader selection of merchandise than traditional stores
that focus on core boating products.
- Sales in merchandise expansion product lines, which include
footwear, apparel, clothing accessories, fishing products and
paddlesports equipment, increased 2.9%, while core product sales
were down 2.2% compared to the same period last year.
Results for the Third Quarter of 2016
Net revenues for the quarter ended October 1, 2016 decreased by
$2.5 million, or 1.3%, to $191.9 million compared to $194.4 million
for the quarter ended October 3, 2015.
Gross margin was steady at 28.9% of revenues, compared to the
same period in 2015. Selling, general and administrative
(“SG&A”) expense increased by $0.3 million, or 0.6%, compared
to the same period in 2015, as higher variable selling and store
depreciation expenses, were partially offset by lower variable
compensation.
Pre-tax income for the third quarter was $7.4 million, compared
to pre-tax income of $8.6 million, for the third quarter of
2015.
Net income for the third quarter was $3.9 million, or $0.15 per
share, compared to net income of $4.9 million, or $0.20 per share,
for the third quarter of 2015.
Inventory at the end of the third quarter was down $5.3 million
compared to the same point in 2015, while accounts payable
increased $17.1 million. As of October 1, 2016, the company had
cash and cash equivalents totaling $93.9 million compared to $60.5
million at the same point in 2015.
Results for the First Nine Months of 2016
Net revenues for the nine months ended October 1, 2016 decreased
by $0.7 million, or 0.1%, to $573.9 million compared to $574.6
million for the nine months ended October 3, 2015. Comparable store
sales for the period increased 1.2% compared to the first nine
months of 2015.
Gross margin expanded to 30.9% of net revenues, compared to
30.3% during the same period in 2015. SG&A expense increased
year-over-year by $2.6 million, primarily as a result of the
company’s biennial training meeting and higher benefit expenses.
These increases were partially offset by lower payroll expense and
a partial settlement received from the Deepwater Horizon Settlement
program.
Pre-tax income for the first nine months ended October 1, 2016
was $28.5 million, compared to $27.6 million, for the quarter ended
October 3, 2015.
Net income for the first nine months was $16.3 million, or $0.65
per share, compared to net income of $15.6 million, or $0.63 per
share, for the first nine months of 2015.
Guidance
Based on information available as of today, the company
reiterated full-year 2016 pre-tax income guidance of $9 to $11
million on consistent revenue levels to last year.
Investor Conference Call
West Marine will hold a conference call and webcast on October
25, 2016, at 4:30 p.m. Eastern Time, to discuss its third quarter
2016 results. The live call will be webcast and available in real
time on the internet at westmarine.com under “Investor Relations.”
Participants also may dial (888) 756-1546 in the United States and
Canada and (706) 634-1041 for international calls. Please be
prepared to give the conference ID number 87936226.
An audio replay of the call will be available October 25, 2016
at 8:00 p.m. Eastern Time through November 1, 2016 at 11:59 p.m.
Eastern Time. The replay number is (855) 859-2056 in the United
States and Canada and (404) 537-3406 for international calls. The
access code is 87936226.
About West Marine
Each person has a unique connection to the water. At West Marine
(westmarine.com) (NASDAQ:WMAR), our knowledge, enthusiasm and
products prepare waterlife adventurers to foster that connection
and explore their passions. With more than 250 stores located in 38
states and Puerto Rico and eCommerce website reaching domestic,
international and professional customers, West Marine is recognized
as a leading Waterlife Outfitter for cruisers, sailors, anglers and
paddlesports enthusiasts. Since first opening our doors in 1968,
West Marine associates continue to share the same love for the
water as our customers and provide helpful advice on the gear and
gadgets they need to be safe and have fun.
Special Note Regarding Forward-Looking
Statements
This press release includes “forward-looking” information (as
defined in the Private Securities Litigation Reform Act of 1995),
including statements that are predictive or express expectations
that depend on future events or conditions that involve risks and
uncertainties. These forward-looking statements may include, among
other things, expectations related to net income, pre-tax income
and profitability, the portion of sales attributable to eCommerce
and our Waterlife stores, expectations that investments will
continue to drive growth strategies, while improving profit
margins, expectations related to cost management and expectations
for the outlook for full-year 2016, as well as facts and
assumptions underlying these expectations and projections. These
statements involve risks and uncertainties that could cause actual
results to differ materially from those reflected in such
statements. Risks, uncertainties and other factors that may cause
actual results to differ materially include those described in the
risk factors set forth in West Marine’s annual report on Form 10-K
for the fiscal year ended January 2, 2016 and quarterly report on
Form 10-Q for the fiscal quarter ended April 2, 2016, as well as
the discussion of critical accounting policies in our Form 10-K for
the fiscal year ended January 2, 2016. In addition, the financial
results presented in this release are preliminary and unaudited,
and may change as the company finalizes its financial statements.
Actual results for the third quarter of 2016 may differ materially
from the preliminary expectations expressed or implied in this
release. Except as required by applicable law, West Marine assumes
no responsibility to update any forward-looking statements as a
result of new information, future events or otherwise.
Non-GAAP Financial Information
This release includes certain financial information not
calculated in accordance with accounting principles generally
accepted in the United States (“GAAP”), specifically EBITDA, which
we define as net income (loss) before interest, depreciation,
amortization and tax expenses. We believe that EBITDA provides a
clearer picture of operating performance of the business, given the
significant investments we are making in the growth of the
business, by eliminating the effects of depreciation and interest
expense. EBITDA is not a measure of financial performance under
GAAP and may not be defined and calculated by other companies in
the same manner. This non-GAAP measure should be considered as a
supplement to, and not as a substitute for, or superior to,
financial measures calculated in accordance with GAAP. EBITDA is
set forth in the table below, and management has reconciled this
non-GAAP financial measure to net income, the most directly
comparable GAAP financial measure in that table. For more
information, see our Current Report on Form 8-K, dated and filed on
October 25, 2016.
West Marine, Inc. |
|
|
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|
Condensed Consolidated Balance Sheets |
|
|
|
|
(Unaudited
and in thousands, except share data) |
|
|
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|
|
|
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|
|
|
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|
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October 1, 2016 |
|
October 3, 2015 |
|
ASSETS |
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
93,921 |
|
|
$ |
60,486 |
|
|
|
Trade receivables, net |
|
|
8,877 |
|
|
|
8,565 |
|
|
|
Merchandise inventories, net |
|
231,679 |
|
|
|
236,984 |
|
|
|
Deferred income taxes |
|
|
- |
|
|
|
5,597 |
|
|
|
Other current assets |
|
|
16,572 |
|
|
|
18,167 |
|
|
|
|
Total
current assets |
|
|
351,049 |
|
|
|
329,799 |
|
|
|
|
|
|
|
|
|
|
|
|
Property
and equipment, net |
|
80,007 |
|
|
|
78,980 |
|
|
|
Long-term
deferred income taxes |
|
4,064 |
|
|
|
3,580 |
|
|
|
Other
assets |
|
|
|
4,586 |
|
|
|
3,348 |
|
|
TOTAL ASSETS |
|
|
$ |
439,706 |
|
|
$ |
415,707 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Accounts
payable |
|
$ |
55,312 |
|
|
$ |
38,203 |
|
|
|
Accrued
payroll |
|
|
14,135 |
|
|
|
17,115 |
|
|
|
Accrued
expenses and other |
|
34,631 |
|
|
|
30,187 |
|
|
|
|
Total
current liabilities |
|
|
104,078 |
|
|
|
85,505 |
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
rent and other |
|
|
18,129 |
|
|
|
20,852 |
|
|
|
|
Total
liabilities |
|
|
122,207 |
|
|
|
106,357 |
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
|
|
Preferred
stock, $.001 par value: 1,000,000 shares authorized; no shares
outstanding |
|
- |
|
|
|
- |
|
|
|
Common
stock, $.001 par value: 50,000,000 shares authorized; 25,634,402
shares issued and 24,945,513 |
|
|
|
|
|
shares outstanding at October 1, 2016, and 25,384,450 shares issued
and 24,695,561 shares outstanding |
|
|
|
|
|
at
October 3, 2015. |
|
|
26 |
|
|
|
25 |
|
|
|
Treasury
stock |
|
|
(9,434 |
) |
|
|
(9,285 |
) |
|
|
Additional
paid-in capital |
|
|
213,753 |
|
|
|
210,743 |
|
|
|
Accumulated
other comprehensive loss |
|
(545 |
) |
|
|
(567 |
) |
|
|
Retained
earnings |
|
|
113,699 |
|
|
|
108,434 |
|
|
|
|
Total stockholders' equity |
|
317,499 |
|
|
|
309,350 |
|
|
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY |
$ |
439,706 |
|
|
$ |
415,707 |
|
|
|
|
|
|
|
|
|
|
|
West Marine, Inc. |
|
|
|
|
|
Condensed Consolidated Statements of
Income |
|
|
|
|
(Unaudited and in thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended |
|
|
October 1, 2016 |
|
October 3, 2015 |
Net
revenues |
$ |
191,852 |
|
|
100.0 |
% |
|
$ |
194,375 |
|
|
100.0 |
% |
Cost of
goods sold |
|
136,502 |
|
|
71.1 |
% |
|
|
138,115 |
|
|
71.1 |
% |
|
Gross profit |
|
55,350 |
|
|
28.9 |
% |
|
|
56,260 |
|
|
28.9 |
% |
Selling,
general and administrative expense |
|
47,871 |
|
|
25.0 |
% |
|
|
47,576 |
|
|
24.4 |
% |
|
Income
from operations |
|
7,479 |
|
|
3.9 |
% |
|
|
8,684 |
|
|
4.5 |
% |
Interest
expense |
|
104 |
|
|
0.1 |
% |
|
|
107 |
|
|
0.1 |
% |
|
Income
before income taxes |
|
7,375 |
|
|
3.8 |
% |
|
|
8,577 |
|
|
4.4 |
% |
Provision for income taxes |
|
3,522 |
|
|
1.8 |
% |
|
|
3,685 |
|
|
1.9 |
% |
|
Net income |
$ |
3,853 |
|
|
2.0 |
% |
|
$ |
4,892 |
|
|
2.5 |
% |
|
|
|
|
|
|
|
Net income per common and common equivalent share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.15 |
|
|
|
$ |
0.20 |
|
|
|
Diluted |
$ |
0.15 |
|
|
|
$ |
0.20 |
|
|
|
|
|
|
|
|
|
Weighted
average common and common equivalent |
|
|
|
|
|
shares outstanding: |
|
|
|
|
|
|
Basic |
|
24,941 |
|
|
|
|
24,694 |
|
|
|
Diluted |
|
25,021 |
|
|
|
|
24,718 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39 Weeks Ended |
|
|
October 1, 2016 |
|
October 3, 2015 |
Net
revenues |
$ |
573,856 |
|
|
100.0 |
% |
|
$ |
574,620 |
|
|
100.0 |
% |
Cost of
goods sold |
|
396,370 |
|
|
69.1 |
% |
|
|
400,618 |
|
|
69.7 |
% |
|
Gross profit |
|
177,486 |
|
|
30.9 |
% |
|
|
174,002 |
|
|
30.3 |
% |
Selling,
general and administrative expense |
|
148,634 |
|
|
25.9 |
% |
|
|
146,044 |
|
|
25.4 |
% |
|
Income
from operations |
|
28,852 |
|
|
5.0 |
% |
|
|
27,958 |
|
|
4.9 |
% |
Interest
expense |
|
325 |
|
|
0.0 |
% |
|
|
338 |
|
|
0.1 |
% |
|
Income
before income taxes |
|
28,527 |
|
|
5.0 |
% |
|
|
27,620 |
|
|
4.8 |
% |
Provision for income taxes |
|
12,203 |
|
|
2.2 |
% |
|
|
12,041 |
|
|
2.1 |
% |
|
Net income |
$ |
16,324 |
|
|
2.8 |
% |
|
$ |
15,579 |
|
|
2.7 |
% |
|
|
|
|
|
|
|
Net income per common and common equivalent share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.66 |
|
|
|
$ |
0.63 |
|
|
|
Diluted |
$ |
0.65 |
|
|
|
$ |
0.63 |
|
|
|
|
|
|
|
|
|
Weighted
average common and common equivalent |
|
|
|
|
|
shares outstanding: |
|
|
|
|
|
|
Basic |
|
24,864 |
|
|
|
|
24,599 |
|
|
|
Diluted |
|
24,947 |
|
|
|
|
24,709 |
|
|
|
|
|
|
|
|
|
West Marine, Inc. |
|
|
|
|
|
Condensed Consolidated Statements of Cash
Flows |
|
|
|
|
(Unaudited
and in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39 Weeks Ended |
|
|
|
|
|
|
October 1, 2016 |
|
October 3, 2015 |
|
|
|
|
|
|
|
|
|
|
OPERATING ACTIVITIES: |
|
|
|
|
|
|
Net income |
|
|
$ |
16,324 |
|
|
$ |
15,579 |
|
|
|
Adjustments
to reconcile net income to net cash provided by operating
activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
16,466 |
|
|
|
15,385 |
|
|
|
|
Share-based
compensation |
|
2,065 |
|
|
|
2,154 |
|
|
|
|
Deferred
income taxes |
|
|
799 |
|
|
|
878 |
|
|
|
|
Provision
for doubtful accounts |
|
115 |
|
|
|
62 |
|
|
|
|
Lower of cost or market inventory adjustments |
|
1,962 |
|
|
|
2,128 |
|
|
|
|
Loss on
asset disposals |
|
|
193 |
|
|
|
716 |
|
|
|
Changes in
assets and liabilities: |
|
|
|
|
|
|
Trade receivables |
|
|
(1,850 |
) |
|
|
(1,784 |
) |
|
|
|
Merchandise inventories |
|
(10,788 |
) |
|
|
(24,814 |
) |
|
|
|
Other
current assets |
|
|
6,776 |
|
|
|
7,624 |
|
|
|
|
Other
assets |
|
|
(525 |
) |
|
|
308 |
|
|
|
|
Accounts
payable |
|
|
28,853 |
|
|
|
5,070 |
|
|
|
|
Accrued
payroll |
|
|
(7,371 |
) |
|
|
2,861 |
|
|
|
|
Accrued
expenses and other |
|
7,101 |
|
|
|
2,761 |
|
|
|
|
Deferred
items and other non-current liabilities |
|
257 |
|
|
|
95 |
|
|
|
Net cash
provided by operating activities |
|
60,377 |
|
|
|
29,023 |
|
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
Proceeds
from sale of property and equipment |
|
27 |
|
|
|
29 |
|
|
|
|
Purchases
of property and equipment |
|
(14,800 |
) |
|
|
(15,640 |
) |
|
|
Net cash
used in investing activities |
|
(14,773 |
) |
|
|
(15,611 |
) |
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
Borrowings
on line of credit |
|
951 |
|
|
|
816 |
|
|
|
|
Repayments on line of credit |
|
(927 |
) |
|
|
(816 |
) |
|
|
|
Proceeds from sale of common stock pursuant to Associates Stock
Buying Plan |
|
287 |
|
|
|
296 |
|
|
|
|
Proceeds from exercise of stock options |
|
- |
|
|
|
1,141 |
|
|
|
|
Treasury shares acquired |
|
(149 |
) |
|
|
(114 |
) |
|
|
Net cash
provided by financing activities |
|
162 |
|
|
|
1,323 |
|
|
|
|
|
|
|
|
|
|
|
|
Effect of
exchange rate changes on cash |
|
(4 |
) |
|
|
76 |
|
|
|
|
|
|
|
|
|
|
|
NET
INCREASE IN CASH |
|
|
45,762 |
|
|
|
14,811 |
|
|
|
|
|
|
|
|
|
|
|
CASH AT BEGINNING OF PERIOD |
|
48,159 |
|
|
|
45,675 |
|
|
CASH AT END OF PERIOD |
|
$ |
93,921 |
|
|
$ |
60,486 |
|
|
Other cash flow information: |
|
|
|
|
|
|
Cash paid
for interest |
|
$ |
225 |
|
|
$ |
220 |
|
|
|
Cash paid
for income taxes, net of refunds of $2,947 and $80 |
|
(1,587 |
) |
|
|
44 |
|
|
Non-cash investing activities: |
|
|
|
|
|
|
|
Property
and equipment additions in accounts payable |
|
1,842 |
|
|
|
836 |
|
|
|
|
|
|
|
|
|
|
|
|
West Marine |
|
|
Reconciliations of Non-GAAP
Information |
|
|
Net Income to Earnings Before Interest, Taxes,
Depreciation and Amortization ("EBITDA") |
|
|
(Unaudited and in millions) |
|
|
|
|
|
13 Weeks Ended |
|
39 Weeks Ended |
|
|
|
|
|
October 1, 2016 |
|
October 3, 2015 |
|
October 1, 2016 |
|
October 3, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net Income |
|
|
$ |
3.9 |
|
|
$ |
4.9 |
|
|
$ |
16.3 |
|
|
$ |
15.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add
Back: |
|
|
|
|
|
|
|
|
|
|
|
Interest
Expense |
|
|
|
0.1 |
|
|
|
0.1 |
|
|
|
0.3 |
|
|
|
0.3 |
|
|
|
Depreciation and Amortization * |
|
|
|
5.4 |
|
|
|
5.2 |
|
|
|
16.3 |
|
|
|
15.2 |
|
|
|
Income
Tax Expense |
|
|
|
3.5 |
|
|
|
3.7 |
|
|
|
12.2 |
|
|
|
12.0 |
|
|
|
|
|
|
|
9.0 |
|
|
|
9.0 |
|
|
|
28.8 |
|
|
|
27.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
|
$ |
12.9 |
|
|
$ |
13.9 |
|
|
$ |
45.1 |
|
|
$ |
43.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Included
in cost of goods sold and SG&A. Amortization of deferred
financing costs related to our revolving credit facility are in
interest expense. |
Contact: West Marine, Inc.
Jeffrey Lasher, Executive Vice President and Chief Financial Officer
(831) 761-4229
West Marine (NASDAQ:WMAR)
Graphique Historique de l'Action
De Mai 2024 à Juin 2024
West Marine (NASDAQ:WMAR)
Graphique Historique de l'Action
De Juin 2023 à Juin 2024