West Marine, Inc. (WMAR) saw its loss narrow to $9.79 million, or $0.39 a share for the quarter ended Dec. 31, 2016. In the previous year period, the company reported a loss of $11.06 million, or $0.45 a share.
Revenue during the quarter went down marginally by 0.53 percent to $129.52 million from $130.20 million in the previous year period. Gross margin for the quarter expanded 22 basis points over the previous year period to 21.75 percent. Operating margin for the quarter stood at negative 12.98 percent as compared to a negative 15.52 percent for the previous year period.
Operating loss for the quarter was $16.82 million, compared with an operating loss of $20.21 million in the previous year period.
Matt Hyde, West Marine's chief executive officer, commented: "I'm pleased with how the team has continued to execute on our strategies while driving higher profitability. Of note, our overall pre-tax profits increased 59% on flat sales. These results reflect our vigilance in improving the customer experience, increasing our margins by closing under-performing stores, implementing targeted expense structure improvements, focusing on waterlife store expansion and improving our omni-channel business."
For the financial year 2017, West Marine, Inc. projects revenue to grow in the range of 1 percent to 2 percent.
Operating cash flow improves significantly
West Marine, Inc. has generated cash of $49.34 million from operating activities during the year, up 111.73 percent or $26.04 million, when compared with the last year.
The company has spent $21.80 million cash to meet investing activities during the year as against cash outgo of $22.55 million in the last year. It has incurred net capital expenditure of $21.79 million on net basis during the year, down 3.33 percent or $0.75 million from year ago.
Cash flow from financing activities was $0.43 million for the year, down 73.16 percent or $1.18 million, when compared with the last year.
Cash and cash equivalents stood at $76.14 million as on Dec. 31, 2016, up 58.10 percent or $27.98 million from $48.16 million on Jan. 02, 2016.
Working capital increases marginally
West Marine, Inc. has recorded an increase in the working capital over the last year. It stood at $237.11 million as at Dec. 31, 2016, up 4.59 percent or $10.41 million from $226.70 million on Jan. 02, 2016. Current ratio was at 4.04 as on Dec. 31, 2016, up from 4.02 on Jan. 02, 2016.
Cash conversion cycle (CCC) has decreased to 83 days for the quarter from 90 days for the last year period. Days sales outstanding were almost stable at 2 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 95 days for the quarter compared with 99 days for the previous year period. At the same time, days payable outstanding went up to 15 days for the quarter from 12 for the same period last year.
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