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WestMarineReportsImprovedFirstQuarter2012OperatingResults WATSONVILLE,Calif.,Apr26,2012(BUSINESSWIRE)WestMarine,Inc.(Nasdaq:WMAR)todayreleased unauditedfinancialresultsforthefirstquarterof2012. FirstQuarter2012Highlights: Netrevenueswere$121.5million,anincreaseof6.7%versuslastyear. Comparablestoresalesincreasedby4.3%. Pretaxlosswas$10.6million,a13.5%,or$1.7millionimprovementversuslastyear.(Duetoseasonality, WestMarinehashistoricallyreportedalossforthefirstquarter.) Netlosspersharewas$(0.27)comparedto$(0.55)in2011.(2012netlossreflectedthesignificantfavorable impactofachangeineffectivetaxratetoabenefitof41.2%thisyearversusaprovisionof0.5%lastyear.) Atquarterend,thecompanywasdebtfree.Attheendofthecomparableperiodlastyear,WestMarinehad $21.1millionoutstandingunderitscreditfacility. Inventorypersquarefootdecreasedby4.3%comparedtothefirstquarterlastyear. GeoffEisenberg,WestMarine'sCEO,commented:"2012isofftoastrongstartforWestMarineandweare encouragedbytheseresults.Thesuccessofourgrowthstrategies,combinedwitharelativelywarmanddrySpring, putsusinagreatpositionasweenterourkeyboatingseason.OuroutstandingteamsofAssociatescontinuedto managethebusinesseffectivelyanddeliverimprovedbottomlineresults." 2012FirstQuarterResults Netrevenuesforthe13weeksendedMarch31,2012were$121.5million,up6.7%comparedtonetrevenuesof $113.8millionforthe13weeksendedApril2,2011.RevenuesintheStoressegmentwere$108.1million,up$7.9 million,or7.9%,comparedtothesameperiodlastyear.Comparablestoresalesgrewby4.3%versusthesame periodlastyear.Webelievethisgrowthwasdrivenbybothinternalandexternalfactors.Weexperiencedhigher salesinallcorecategoriesduringthefirstquarter,especiallymaintenancerelatedproducts,whichwebelievewere relatedtothedry,warmweatherandearlySpringexperiencedthisyearacrossmostareasofthecountry.Wealso sawgrowthinoursoftgoodscategories,reflectingthesuccessofourmerchandiseexpansionstrategy.Our revenuesfromstoresopenedorexpandedin2011andthefirstthreemonthsof2012contributed$13.8milliontoour Storessegment.Theimpactofstoresclosedduringthesesameperiodseffectivelyreducedrevenuesby$9.2 million.Themajorityoftheclosureswerearesultofourongoingrealestateoptimizationstrategytoevolveinto havingfewer,largerstores. OurPortSupplysegmentrevenues,representingsalestoourwholesalecustomersthroughourdistributioncenters, forthefirstquarterof2012were$6.3million,adecreaseof$0.2million,or3.6%,comparedtothesameperiodlast year.Ourongoingexecutionofrealestateoptimization,includingaddinghubsinourstorelocationsthattargetand catertoPortSupplycustomers,continuestoshiftrevenuefromthePortSupplysegmenttotheStoressegment. Webelievetheseinitiativesimproveourservicemodeltoourwholesalecustomers. NetrevenuesinourDirecttoCustomersegmentforthequarterwere$7.1million,adecreaseof$0.1million,or 0.7%,comparedtothesameperiodlastyear.Ourdomesticsalesdemonstratedsolidgrowth.Thisgrowthwas offset,however,bylowersalestointernationalcustomers. Grossprofitforthefirstquarterwas$29.5million,anincreaseof$4.8millioncomparedto2011.Asapercentageof netrevenues,grossprofitincreasedby2.6%to24.3%,comparedtogrossprofitof21.7%lastyear.Thisincrease wasdrivenprimarilybya1.7%improvementinrawproductmargins,duetolesspromotionalandclearanceactivity. Therealsowasasalesmixshiftawayfromhigherpriced,butlowermarginitems,suchaselectronics,tohigher marginmaintenancerelateditems.Weattributethisshifttothemildanddryweather,whichpromptedcustomersto preparetheirboatsearlierintheseasonthisyear.Theincreaseingrossprofitasapercentageofrevenuesalso resultedfromourleveragingofrelativelyfixedoccupancyexpenseby1.1%onthehighersalesanda0.1% improvementinshrinkresults.Grossprofitmarginimprovementswerepartiallyoffsetbya0.3%increaseinunit buyinganddistributioncostsincurredthisyear. Selling,general&administrative("SG&A")expenseforthequarterwas$39.9million,anincreaseof$3.0million comparedtothesameperiodlastyear.Asapercentageofnetrevenues,SG&Aexpenseincreasedby0.5%to 32.9%,onhighersales.DriversofthehigherSG&Aexpenseincluded:$1.0millioninhigheraccruedbonus expense,reflectingperformanceabovebudgetedexpectations$0.7millioninhigherstorepayrolltosupportthe
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highersalesandfortrainingrelatedtoournewpointofsalesystem$0.7millioninhigherstoreprojectexpense reflectingtheopeningofthreeflagshipstoresduringthefirstquarterthisyearcomparedtooneflagshipstorelast yearand$0.4millioninhigherinformationtechnologyspending. Pretaxlossforthe13weeksendedMarch31,2012was$10.6million,a$1.7million,or13.5%,improvementfrom pretaxlossof$12.3millionlastyear. Theeffectiveincometaxrateforthefirstquarterof2012wasabenefitof41.2%,comparedtoaprovisionof0.5% in2011.Theyearoveryearchangeinoureffectivetaxrateprimarilywasduetothereleaseofmostofourvaluation allowanceduringthesecondquarteroffiscal2011.Thereleaseofthisvaluationallowancelastyearreturnedustoa morenormalizedeffectivetaxratethisyear.Asaresult,wewereabletorecordataxbenefitinthefirstquarterof 2012sinceitwasalossquarterwithinaforecastedprofitableyear.Thisbenefitwasnotavailabletousduringthe firstquarterof2011sinceafullvaluationallowancewasinplaceagainstourdeferredtaxassetsatthattime. Netlosspersharewas$(0.27)pershare,a50.9%improvementcomparedtoanetlosspershareof$(0.55)per sharelastyear. Totalinventoryattheendofthefirstquarterwas$240.9million,a$6.8million,or2.7%,decreaseversusthefirst quarteroflastyear,anda4.3%decreaseonaninventorypersquarefootbasis.Inventoryturnsfor2012wereup slightlyversusthefirstquarteroflastyear. Weareencouragedbyourfirstquarterresultsandareconfirmingourpreviouslycommunicatedfullyearguidance for2012. WEBCASTANDCONFERENCECALL Aspreviouslyannounced,WestMarinewillholdaconferencecallandwebcastonThursday,April26,2012,at 10:00AMPacificTimetodiscussfirstquarter2012financialresults.Thelivecallwillbewebcastandavailablein realtimeontheInternetatwestmarine.comunder"InvestorRelations."Theearningsreleasewillalsobepostedon theInternetatwestmarine.comunder"PressReleases"ontheInvestorRelationspage.Pleaseallowextratime priortothecalltovisitthesiteanddownloadthestreamingmediasoftwarerequiredtolistentotheInternet broadcast. Interestedpartiescanalsoconnecttotheconferencecallbydialing(800)3416235intheUnitedStatesand Canadaand(706)6341041forinternationalcalls.PleasebepreparedtogivetheconferenceIDnumber70199041. ThecallleaderisGeoffEisenberg,WestMarine'sPresidentandChiefExecutiveOfficer. AnaudioreplayofthecallwillbeavailableApril26,2012at1:00PMPacificTimethroughMay3,2012at8:59PM PacificTime.Thereplaynumberis(855)8592056intheUnitedStatesandCanadaand(404)5373406for internationalcalls.Theaccesscodeis70199041. ABOUTWESTMARINE WestMarine,thelargestspecialtyretailerofboatingsuppliesandaccessories,has313companyoperatedstores locatedin38states,PuertoRico,CanadaandthreefranchisedstoreslocatedinTurkey.OurDirecttoCustomer division,whichcomprisesourcallcenter,directmailandecommercechannels,offersCustomersover75,000 productsplustheconvenienceofexchangingcatalogandecommercepurchasesatourStorelocations.OurPort Supplydivisionisoneofthelargestwholesaledistributorsofmarineequipmentservingboatmanufacturers,marine services,commercialvesseloperatorsandgovernmentagencies.FormoreinformationonWestMarine'sproducts andstorelocations,ortostartshopping,visitwestmarine.comorcall1800BOATING(18002628464). SPECIALNOTEREGARDINGFORWARDLOOKINGSTATEMENTS Thispressreleaseincludes"forwardlookingstatements"withinthemeaningofSection21EoftheSecurities ExchangeActof1934,includingstatementsconcerningstatementsthatarepredictiveorexpressexpectationsthat dependonfutureeventsorconditionsthatinvolverisksanduncertainties.Theseforwardlookingstatements include,amongotherthings,statementsthatrelatetoourexpectationsandprojectionswithrespecttoourabilityto executeonourstrategicgrowthstrategies,expectationsrelatedtoourearningsandgrowthinprofitability,andour expectationsforfullyear2012results,aswellasfactsandassumptionsunderlyingtheseexpectationsand projections.Inaddition,theresultspresentedinthisreleasearepreliminaryandunaudited,andmaychangeaswe finalizeourfinancialstatements.Actualresultsforourfirstquarterof2012andthecurrentfiscalyearmaydiffer materiallyfromthepreliminaryexpectationsexpressedorimpliedinthisreleaseduetovariousrisks,uncertainties orotherfactors,includingtheriskfactorssetforthinWestMarine'sannualreportonForm10Kforthefiscalyear
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endedDecember31,2011,aswellasthediscussionofcriticalaccountingpoliciesinourForm10Kfortheyear endedDecember31,2011.Exceptasrequiredbyapplicablelaw,WestMarineassumesnoresponsibilitytoupdate anyforwardlookingstatementsasaresultofnewinformation,futureeventsorotherwise.

WestMarine,Inc. CondensedConsolidatedBalanceSheets (Unauditedandinthousands,exceptsharedata) March31, April2, 2012 2011 ASSETS Currentassets: Cash Tradereceivables,net Merchandiseinventories Deferredincometaxes Othercurrentassets Totalcurrentassets Propertyandequipment,net Longtermdeferredtaxes Otherassets TOTALASSETS

$ 2,230 $ 2,068 7,754 6,793 240,884 247,694 5,727 3,151 24,686 19,341 281,281 279,047 61,295 57,577 7,993 3,180 3,383 $ 353,749 $ 340,007

LIABILITIESANDSTOCKHOLDERS'EQUITY Currentliabilities: Accountspayable $ 47,684 $ 54,721 Accruedexpensesandother 40,564 38,848 Totalcurrentliabilities 88,248 93,569 Longtermdebt 21,071 Deferredrentandother 14,348 15,291 Totalliabilities 102,596 129,931 Stockholders'equity: Preferredstock,$.001parvalue:1,000,000sharesauthorizedno sharesoutstanding Commonstock,$.001parvalue:50,000,000sharesauthorized 23,176,737sharesissuedand23,145,847sharesoutstandingatMarch 23 23 31,2012,and22,693,437sharesissuedand22,662,547shares outstandingatApril2,2011. Treasurystock (385 ) (385 ) Additionalpaidincapital 187,925 182,697 Accumulatedothercomprehensiveloss (806 ) (895 ) Retainedearnings 64,396 28,636 Totalstockholders'equity 251,153 210,076 TOTALLIABILITIESANDSTOCKHOLDERS'EQUITY $ 353,749 $ 340,007 WestMarine,Inc. CondensedConsolidatedStatementsofOperations (Unauditedandinthousands,exceptpersharedata) 13WeeksEnded March31,2012 April2,2011
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Netrevenues $ 121,468 100.0 % $ 113,817 100.0 % Costofgoodssold 91,968 75.7 % 89,136 78.3 % Grossprofit 29,500 24.3 % 24,681 21.7 % Selling,generalandadministrativeexpense 39,903 32.9 % 36,871 32.4 % Restructuringcosts(recoveries) 5 0.0 % (77 ) 0.1 % Lossfromoperations (10,408 ) 8.6 % (12,113 ) 10.6 % Interestexpense 220 0.1 % 167 0.2 % Lossbeforeincometaxes (10,628 ) 8.7 % (12,280 ) 10.8 % Provision(benefit)forincometaxes (4,381 ) 3.6 % 65 0.0 % Netloss $ (6,247 ) 5.1 % $ (12,345 ) 10.8 % Netlosspercommonandcommonequivalentshare: Basic $ (0.27 ) $ (0.55 ) Diluted $ (0.27 ) $ (0.55 ) Weightedaveragecommonandcommonequivalent sharesoutstanding: Basic 23,012 22,639 Diluted 23,012 22,639 WestMarine,Inc. CondensedConsolidatedStatementsofCashFlows (Unauditedandinthousands) 13WeeksEnded March31, April2, 2012 2011 OPERATINGACTIVITIES: Netloss $ (6,247 ) $ (12,345 ) Adjustmentstoreconcilenetlosstonetcashusedinoperating activities: Depreciationandamortization 3,760 3,507 Sharebasedcompensation 648 570 Taxbenefitforequityissuance 95 52 Excesstaxbenefitfromsharebasedcompensation (217 ) (52 ) Deferredincometaxes 1,532 (1 ) Provisionfordoubtfulaccounts 94 26 Lowerofcostormarketinventoryadjustments 834 1,487 Loss(gain)onassetdisposals 79 (4 ) Changesinassetsandliabilities: Tradereceivables (2,077 ) (1,214 ) Merchandiseinventories (48,343 ) (47,593 ) Othercurrentassets (10,893 ) (2,602 ) Otherassets (239 ) (147 ) Accountspayable 21,264 26,061 Accruedexpensesandother (35 ) (4,081 ) Deferreditemsandothernoncurrentliabilities 93 345 Netcashusedinoperatingactivities (39,652 ) (35,991 ) INVESTINGACTIVITIES:
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Purchasesofpropertyandequipment Proceedsfromsaleofpropertyandequipment Netcashusedininvestingactivities FINANCINGACTIVITIES: Borrowingsonlineofcredit Repaymentsonlineofcredit Proceedsfromexerciseofstockoptions Excesstaxbenefitfromsharebasedcompensation Netcashprovidedbyfinancingactivities Effectofexchangeratechangesoncash NETDECREASEINCASH CASHATBEGINNINGOFPERIOD CASHATENDOFPERIOD Othercashflowinformation: Cashpaidforinterest Cashpaidforincometaxes Noncashinvestingactivities: Propertyandequipmentadditionsinaccountspayable
SOURCE:WestMarine,Inc. WestMarine,Inc. TomMoran,8317614229 SeniorVicePresidentandChiefFinancialOfficer

(3,401 20 (3,381 1,156 (1,156 1,093 217 1,310 (13 (41,736 43,966 $ 2,230 $ 167 150 422

) )

(5,262 13 (5,249

) )

22,543 ) (1,472 ) 184 52 21,307 ) (18 ) ) (19,951 ) 22,019 $ 2,068 $ 88 160 1,757

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