SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 2, 2006
West Marine, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-22512 77-0355502
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(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification No.)
incorporation)
500 Westridge Drive 95076
Watsonville, California
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(Address of principal executive offices) (Zip Code)
(831) 728-2700
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(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
On March 2, 2006, West Marine, Inc. announced certain preliminary unaudited
financial results for the 13-week period (fourth quarter) and 52-week period
ended December 31, 2005. A copy of this press release is attached hereto as
Exhibit 99.1.
The information required to be furnished pursuant to Item 2.02 and Exhibit 99.1
of this report shall not be deemed to be "filed" for purposes of Section 18 of
the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject
to the liability of that section, except if West Marine specifically
incorporates it by reference into a filing under the Securities Act of 1933
or the Exchange Act.
Item 9.01. Financial Statements and Exhibits.
(a) Not Applicable.
(b) Not Applicable.
99.1 Press Release dated March 2, 2006 (furnished pursuant to
Item 2.02 of Form 8-K)
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WEST MARINE, INC.
Date: March 2, 2006 By: /s/ Eric Nelson
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Eric Nelson
Senior Vice President and
Chief Financial Officer
Exhibit 99.1
Contacts: West Marine, Inc.
Eric Nelson, Senior Vice President and Chief Financial Officer
(831) 761-4489
Russell Solt, Director of Investor Relations
(831) 761-4229
WEST MARINE RELEASES PRELIMINARY FOURTH QUARTER 2005 RESULTS
WATSONVILLE, CA, March 2, 2006 - West Marine, Inc. (Nasdaq: WMAR) today
released preliminary unaudited operating results for the fourth quarter ended
December 31, 2005, subject to our further review of certain capitalized software
costs. In light of recent events, we are reviewing uncompleted software
development projects, and if and to the extent we determine that such projects
are no longer expected to provide a future benefit, we may be required to
realize a non-cash impairment charge. The carrying value of all uncompleted
software development projects at December 31, 2005 was approximately $9.1
million, although we do expect to receive a future benefit from some portion of
these projects.
Preliminary unaudited net loss for the fourth quarter ended December 31,
2005, not including possible impairment charges related to internal software
costs no longer expected to provide a future benefit, was $17.4 million, or
($0.82) per share, compared to a net loss of $3.4 million, or ($0.16) per share,
for the fourth quarter of 2004. Net sales for the fourth quarter of 2005 were
$124.8 million, compared to net sales of $118.1 million a year ago. Comparable
store sales for the fourth quarter of 2005 increased 3.9% compared to the same
period a year ago. Comparable store sales are defined as sales from stores that
have been open at least thirteen months and where selling square footage did not
change by more than 40% in the previous thirteen months.
FISCAL YEAR 2005
Preliminary unaudited net income for the fifty-two weeks ended December 31,
2005, not including possible impairment charges related to internal software
costs no longer expected to provide a future benefit, was $2.0 million, or $0.09
per share, compared to net income of $25.5 million, or $1.20 per share, for the
same period a year ago. Net sales for fiscal year 2005 were $692.3 million,
compared to net sales of $683.0 million for fiscal year 2004. Comparable store
sales for the fifty-two weeks ended December 31, 2005 decreased (2.2%) compared
to the same period a year ago.
SIGNIFICANT ITEMS
Eric Nelson, West Marine's chief financial officer, stated, "Our
preliminary unaudited fourth quarter results include two significant items not
reflected in our previous guidance. First, we reduced inventory value by $2.9
million, or ($0.08) per share after-tax. Second, we recorded a $2.0 million
pre-tax charge, or ($0.06) per share after-tax, for a cancelled software
development project. As indicated above, we are currently completing a review of
all internally developed software projects. Situations where internal software
development costs are no longer expected to provide a future benefit may result
in an additional impairment charge.
Other significant fourth quarter items include a $2.0 million pre-tax
charge, or ($0.06) for discontinuing our use of the BoatUS tradename, and a $0.8
million pre-tax charge, or ($0.02) per share after-tax, for costs related to
replacing our line of credit. Both of these charges were contemplated in our
previous guidance.
ABOUT WEST MARINE
West Marine, the country's favorite retailer of boating supplies and
accessories, has over 400 stores located in 38 states, Puerto Rico and Canada.
The Company's catalog and Internet channels offer customers approximately 50,000
products - far more than any competitor - and the convenience of exchanging
catalog and Internet purchases at its retail stores. The Company's Port Supply
division is the country's largest wholesale distributor of marine equipment
serving boat manufacturers, marine services, commercial vessel operators and
government agencies. For more information on West Marine's products and store
locations, or to start shopping, visit westmarine.com or call 1-800-BOATING
(1-800-262-8464).
Special Note Regarding Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning
of Section 21E of the Securities Exchange Act of 1934, including forward-looking
statements concerning earnings expectations and statements that are predictive
or express expectations that depend on future events or conditions that that
involve risks and uncertainties. These forward-looking statements include, among
other things, statements that relate to West Marine's preliminary earnings, as
well as facts and assumptions underlying these preliminary results. Actual
results may differ materially from the results expressed or implied in these
forward-looking statements due to various risks, uncertainties or other factors.
Risks and uncertainties include West Marine's ability to accurately identify and
assess the potential of software development projects. Other risk factors that
may affect our earnings in the future are described from time to time in West
Marine's filings with the Securities and Exchange Commission, including West
Marine's quarterly report on Form 10-Q for the period ended October 1, 2005.
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.