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West Marine reports 1Q results

West Marine today reported a 10.9 percent drop in net revenues for the first quarter, but operating results improved by $11 million compared to last year, reflecting the company's best first-quarter pretax results since 2005.

"We are pleased to report these considerably improved operating results, despite a sales decline which reflects market and industry conditions," said Geoff Eisenberg, West Marine CEO, in a statement.

In a conference call with analysts this morning, Eisenberg said the decline in sales was "in line with expectations," noting the importance of being realistic in the current economic climate.

Net revenues for the quarter ending April 4 were $101 million, compared to $113.3 million in the quarter ending March 29, 2008. Same-store sales were down 6.8 percent. The company reported a pretax loss of $14.4 million, compared to $25.4 million last year.

"While we've always experienced a loss in the first quarter due to seasonality in our business, this quarter's operating results reflect changes we have made to strengthen the company in the face of current economic conditions," Eisenberg said.

West Marine cut expenses by 21.2 percent, to $36.9 million, in the 2009 quarter, and cash from operating activities improved by $4.9 million. Long-term debt was down $13.2 million, or 14.8 percent, from this time last year, and unused credit facility availability was more than $86 million at quarter-end.

Net loss for the recent quarter was $14.8 million, or 67 cents per share, compared to a net loss of $17.6 million, or 81 cents per share, in the first quarter of 2008.

Eisenberg this morning discussed West Marine's recent opening of two flagship stores in Jacksonville, Fla., and Brick, N.J., saying both had "extremely successful grand opening events and are currently performing very well."

While he did not announce locations for any future flagship stores, Eisenberg said the company will continue to review the strategy of opening larger stores in medium markets, while closing smaller stores in the same areas. West Marine previously announced the closure of 32 stores, a distribution center and the transition of a call center to a work-at-home format for employees.

Company officials said they also are happy with inventory levels, noting a 9.9 percent decrease.

Looking forward to the remainder of 2009, chief financial officer Tom Moran told analysts that he wouldn't give specific guidance, but the general outlook remained "unchanged," and the company expects sales to decline for the year at roughly the same pace it is currently experiencing.

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