Patience may be a virtue, but that doesn't mean it's always rewarded.
After waiting patiently for two weeks for boating accessory retailer West Marine (Nasdaq: WMAR ) to file its 10-K form, investors learned on Friday that they'll need to wait a bit longer. In an NT 10-K filing, the firm confirmed that it could not file its 10-K as planned by March 15 "without unreasonable effort or expense due to the fact that the company had to allocate significant time and resources" to restating several years' worth of past financial statements. Management promises to get the 10-K out the door "within the next fifteen calendar days."
Rather than keep waiting, I'm going to go ahead and give you a quick rundown of what we know at this point, based on the firm's unaudited financials in its March 1 earnings release. Without further ado:
Fiscal 2006 was either a good one for West Marine, or a very bad one, depending on whether you focus on cash profits or their accounting cousins (generally accepted accounting principles). From a cash perspective, the company's $38.7 million in free cash flow tripled 2005's take and marked a huge improvement over the negative free cash flow of the two preceding years. The fact that West Marine was able to reduce its inventories by nearly 9% year over year, and its accounts receivable by almost 7%, certainly contributed to the improved cash flow picture. Nonetheless, from the perspective of GAAP accounting, West Marine had to report a $0.33 per-share loss for the year, its $0.12 in operating profit more than wiped out by a $0.46-per-share charge for "store closures and other restructuring costs."
Revenue-wise, the company grew same-store sales 2.4%, and total sales 3.5%. Don't expect to see that repeat this year, however. Management guided investors to expect a sales decline in fiscal 2007, of about 1% judging from the prediction of $706 million to $716 million in revenue. Not all of the decline can be attributed to store closings, either, as management is expecting same-store sales to come in even lighter than last year at just 1% to 2%.
None of this is terribly surprising. It looks like sales declines in the boating accessories market are roughly tracking those of the market for recreational boats themselves. The good news for West Marine investors? Firms like boat seller MarineMax (NYSE: HZO ) , and boat makers Brunswick (NYSE: BC ) and Marine Products (NYSE: MPX ) , usually report their quarterly numbers before West Marine does, giving the latter's shareholders advance warning on how their quarters will most likely turn out.
Speaking of which, here's how they've been doing lately:
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Fool contributor Rich Smith does not own shares of any company named above.
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