West Marine says more boaters are on the water

Santa Cruz Sentinel

WATSONVILLE — Good spring weather, dwindling competition and an improving economy helped West Marine increase second quarter revenues by 11.5 percent and close its seventh consecutive quarter of improved operating results compared to the previous year, executives announced Thursday.

“We’re happy to be able to share with you some solid results,” said Geoff Eisenberg, chief executive officer and president.

Earnings per share for the second quarter were $1.52, compared to $1.46 for the same period last year.

“The positives and negatives roughly offset each other,” Eisenberg told investors on a conference call.

Eisenberg cited the closure last year of chief competitor, Boaters World, as boosting West Marine, along with good spring weather in a balmy Northeast. He said, however, there were also challenges during the year, such as problems with the company’s website overhaul and ongoing uncertainty about the impact of the Gulf oil spill on boaters.

“Our primary concern is the health and well-being of the ecosystem and the people who live and work in the region, including hundreds of West Marine associates and their families,” Eisenberg said. But, while the company can’t predict the future impact of the spill, it represents “a relatively small portion of West Marine’s revenues,” he said.

“The net effect on West Marine was not significant,” Eisenberg said. “We have not yet filed any claims with BP, but we may in the future if we believe we have incurred losses because of the spill.”

The company is continuing with several technology upgrades including plans to introduce a better website, and initiate several technological features to both customers and internal communications.

As part of the company’s ongoing plan to replace its smaller stores with fewer, larger ones, the company has opened six stores this year and closed 11.

There’s no way to know how the Gulf oil spill will impact the boating industry in the long-term, Eisenberg said. Initially the company saw a drop-off in traditional boating-related sales that was offset by sales relating to cleanup efforts, but that work seemed to be slowing down now.

“We don’t really know what’s going to happen with the recreational and fishing,” Eisenberg said. “We track the fishing closures every day and more areas are opening up. We do assume that the wholesale side, the commercial side, will decline, but we don’t know if it will be offset. We just don’t know.”

Another challenge for the company has been fallout from an overhaul of the website. It didn’t exactly work as planned and customers encountered some problems, the company said.

West Marine Inc.

WHAT: West Marine is a retailer and wholesaler of boating supplies with 330 company-owned stores in 38 states, Puerto Rico and Canada and two franchised stores in Turkey.
HEADQUARTERS: 500 Westridge Drive, Watsonville
INFORMATION: 728-2700; http://www.westmarine.com
HISTORY: Founded by Randy Repass in 1968 as a mail order business. First store opened in 1975 and the company went public in 1993.
LEADERSHIP: Geoff Eisenberg, president and chief executive officer
EMPLOYEES: 4,149 people at year-end
STOCK: West Marine shares trading on the NASDAQ as WMAR dropped 51 cents Thursday to close at $10.39. The 52-week range is $6.81-$13.63.
FINANCIALS: Net income for the second quarter was $35.1 million, or $1.52 per share, compared to $32.5 million, or $1.46 per share, for the same period last year. Revenues were $233.39 million compared to $215.37 million, in the same quarter.

This article first appeared here.


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