West Marine reports US$65.7 million Q4 loss
By IBI Magazine
West Marine today reported sales of US$118.3 million for its fourth quarter ended December 29, 2007, a decrease of 4.6 per cent compared to the same period a year ago. The company also reported a net loss of US$65.7 million for the quarter, compared to a loss of US$12.8 million a year ago. Same-store sales decreased 3 per cent during the quarter. For the year, West Marine had sales of US$679.5 million compared to sales of US$716.6 million a year ago. Same store sales were down by 1.9 per cent for the year. It also reported a net loss of US$50.2 million, compared to a restated net loss of US$7.7 million a year ago. "West Marine's financial results for 2007 reflected a challenging year in our industry," said West CEO Geoff Eisenberg in a statement. "Within this climate, we have focused on managing the business to weather this downturn and emerge as an even stronger company. We will continue to pursue initiatives and strategies that we expect to drive growth and profitability in the medium and long term." The statement noted the following events impacted its fourth-quarter and 2007 results:
• An updated assessment of goodwill in the fourth quarter which resulted in a non-cash impairment charge of US$56.9 million pre-tax, or $2.25 per share after-tax.
• Continued cooperation with an SEC investigation resulted in expenditures of $2.7 million pre-tax, or $0.08 per share after-tax.
• The departure of our former chief executive officer resulted in related severance costs in the fourth quarter of US$1.3 million pre-tax, or $0.04 per share after-tax.
• Management's ongoing evaluation of individual store performance resulted in a non-cash asset impairment charge of $0.9 million pre-tax, or $0.02 per share after-tax.
• Costs relating to West Marine's store closure and restructuring in 2006 affected both years. The previously-reported pre-tax expense impact was US$14.5 million in 2006, or $0.46 per share, and there was an additional $0.6 million, or $0.02 per share, in 2007 for adjusted store closure reserves to reflect revised market information.
(26 March 2008)
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