SOURCE: PriceSmart, Inc.

PriceSmart, Inc.

January 08, 2010 08:00 ET

PriceSmart Announces First Quarter Results of Operations

December Sales Also Announced

SAN DIEGO, CA--(Marketwire - January 8, 2010) - PriceSmart, Inc. (NASDAQ: PSMT) (www.pricesmart.com) today announced its results of operations for the first quarter of fiscal year 2010 which ended on November 30, 2009.

For the first quarter of fiscal year 2010, net warehouse sales increased 3.4% to $308.7 million from $298.5 million in the first quarter of fiscal year 2009. Total revenue for the first quarter was $315.4 million compared to $305.2 million in the prior year. The Company had 26 clubs in operation as of November 30, 2009, compared to 25 warehouse clubs in operation as of November 30, 2008.

The Company recorded operating income in the quarter of $16.2 million, compared to operating income of $14.9 million in the prior year. Net income attributable to PriceSmart was $10.4 million, or $0.35 per diluted share, in the first quarter of fiscal year 2010. Net income attributable to PriceSmart in the first quarter of fiscal year 2009 was $10.7 million, or $0.36 per diluted share which included a $1.0 million ($0.03 per diluted share) benefit to tax expense in that prior period. The Company will release its quarterly report on Form 10-Q for the first quarter of fiscal year 2010 on or before January 11, 2010.

The Company also announced that for the month of December 2009, net sales increased 8.0% to $152.1 million from $140.8 million in December a year earlier. For the four months ended December 31, 2009, net sales increased 4.9% to $460.7 million from $439.3 million in the same period last year. There were 26 warehouse clubs in operation at the end of December 2009.

For the four weeks ended December 27, 2009, comparable warehouse sales for the 25 warehouse clubs open at least 12 full months increased 3.5% compared to the same four-week period last year. For the seventeen-week period ended December 27, 2009, comparable warehouse sales increased 1.2% compared to the comparable seventeen-week period a year ago.

About PriceSmart

PriceSmart, headquartered in San Diego, owns and operates U.S.-style membership shopping warehouse clubs in Central America and the Caribbean, selling high quality merchandise at low prices to PriceSmart members. PriceSmart now operates 26 warehouse clubs in 11 countries and one U.S. territory (five in Costa Rica; four in Panama; three each in Guatemala and Trinidad, two each in Dominican Republic, El Salvador and Honduras; and one each in Aruba, Barbados, Jamaica, Nicaragua and the United States Virgin Islands).

This press release may contain forward-looking statements concerning the Company's anticipated future revenues and earnings, adequacy of future cash flow and related matters. These forward looking statements include, but are not limited to, statements containing the words "expect," "believe," "will," "may," "should," "project," "estimate," "scheduled," and like expressions, and the negative thereof. These statements are subject to risks and uncertainties that could cause actual results to differ materially, including the following risks: the Company's financial performance is dependent on international operations which exposes the Company to various risks; any failure by the Company to manage its widely dispersed operations could adversely affect the Company's business; the Company faces significant competition; the Company faces difficulties in the shipment of and inherent risks in the importation of merchandise to its warehouse clubs; the Company is exposed to weather and other risks associated with international operations; declines in the economies of the countries in which the Company operates its warehouse clubs would harm its business; a few of the Company's stockholders own nearly 40% of the Company's voting stock, which may make it difficult to complete some corporate transactions without their support and may impede a change in control; the loss of key personnel could harm the Company's business; the Company is subject to volatility in foreign currency exchange; the Company faces the risk of exposure to product liability claims, a product recall and adverse publicity; a determination that the Company's long-lived or intangible assets have been impaired could adversely affect the Company's future results of operations and financial position; and the Company faces increased compliance risks associated with compliance with Section 404 of the Sarbanes-Oxley Act of 2002; as well as the other risks detailed in the Company's SEC reports, including the Company's Annual Report on Form 10-K filed pursuant to the Securities Exchange Act of 1934 on November 9, 2009. We assume no obligation and expressly disclaim any duty to update any forward-looking statement to reflect events or circumstances after the date of this presentation or to reflect the occurrence of unanticipated events.


                             PRICESMART, INC.
                    CONSOLIDATED STATEMENTS OF INCOME
         (UNAUDITED--AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)



                                                       Three Months Ended
                                                          November 30,
                                                      --------------------
                                                        2009       2008
                                                      ---------  ---------
Revenues:
Net warehouse club sales                              $ 308,653  $ 298,518
Export sales                                                587        836
Membership income                                         4,649      4,325
Other income                                              1,530      1,529
                                                      ---------  ---------
Total revenues                                          315,419    305,208
                                                      ---------  ---------
Operating expenses:
Cost of goods sold:
Net warehouse club                                      261,717    254,426
Export                                                      554        800
Selling, general and administrative:
Warehouse club operations                                29,234     27,280
General and administrative                                7,568      7,544
Pre-opening expenses                                        111         --
Asset impairment and closure costs                           --        248
                                                      ---------  ---------
Total operating expenses                                299,184    290,298
                                                      ---------  ---------
Operating income                                         16,235     14,910
Other income (expense):
Interest income                                             215        126
Interest expense                                           (630)      (581)
Other income (expense), net                                   4        (20)
                                                      ---------  ---------
Total other income (expense)                               (411)      (475)
                                                      ---------  ---------
Income from continuing operations before provision
 for income taxes and loss of unconsolidated
 affiliates                                              15,824     14,435
Provision for income taxes                               (5,401)    (3,647)
Loss of unconsolidated affiliates                            (2)        (5)
Income from continuing operations                        10,421     10,783
Income (loss) from discontinued operations, net of
 tax                                                          9        (19)
                                                      ---------  ---------
Net income                                               10,430     10,764
Net income attributable to noncontrolling interest          (53)       (66)
                                                      ---------  ---------
Net income attributable to PriceSmart                 $  10,377  $  10,698
                                                      =========  =========

Net income attributable to PriceSmart:
Income from continuing operations                     $  10,368  $  10,717
Income (loss) from discontinued operations, net of
 tax                                                          9        (19)
                                                      ---------  ---------
                                                      $  10,377  $  10,698
                                                      =========  =========

Net income per share attributable to PriceSmart and
 available for distribution:
Basic net income per share from continuing operations $    0.35  $    0.36
Basic net income per share from discontinued
 operations, net of tax                               $      --  $      --
                                                      ---------  ---------
Basic net income per share                            $    0.35  $    0.36
                                                      =========  =========

Diluted net income per share from continuing
 operations                                           $    0.35  $    0.36
Diluted net income per share from discontinued
 operations, net of tax                               $      --  $      --
                                                      ---------  ---------
Diluted net income per share                          $    0.35  $    0.36
                                                      =========  =========

Shares used in per share computations:
Basic                                                    29,105     28,860
                                                      =========  =========
Diluted                                                  29,163     28,964
                                                      =========  =========
Dividends per share                                   $      --  $      --
                                                      =========  =========





                             PRICESMART, INC.
                        CONSOLIDATED BALANCE SHEETS
          (UNAUDITED--AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)



                                                    November 30, August 31,
                                                        2009       2009
                                                      ---------  ---------
ASSETS
Current Assets:
Cash and cash equivalents                             $  39,039  $  44,193
Short-term restricted cash                                   --         10
Receivables, net of allowance for doubtful accounts
 of $8 and $10 in November and August of 2009,
 respectively                                             2,399      2,187
Merchandise inventories                                 147,390    115,841
Deferred tax assets - current                             2,940      2,618
Prepaid expenses and other current assets                18,010     19,033
Assets of discontinued operations                           947        900
                                                      ---------  ---------
Total current assets                                    210,725    184,782
Long-term restricted cash                                   765        732
Property and equipment, net                             236,857    231,798
Goodwill                                                 37,415     37,538
Deferred tax assets - long term                          19,849     20,938
Other assets                                              3,885      3,927
Investment in unconsolidated affiliates                   7,761      7,658
                                                      ---------  ---------
Total Assets                                          $ 517,257  $ 487,373
                                                      =========  =========
LIABILITIES AND EQUITY
Current Liabilities:
Short-term borrowings                                 $   2,951  $   2,303
Accounts payable                                        113,280    101,412
Accrued salaries and benefits                             7,715      8,831
Deferred membership income                                8,977      8,340
Income taxes payable                                      5,937      5,942
Other accrued expenses                                    9,481     10,022
Long-term debt, current portion                           5,386      4,590
Deferred tax liability - current                            198        189
Liabilities of discontinued operations                      121        299
                                                      ---------  ---------
Total current liabilities                               154,046    141,928
Deferred tax liability - long-term                        1,224      1,026
Long-term portion of deferred rent                        2,793      2,673
Long-term income taxes payable, net of current
 portion                                                  3,562      3,458
Long-term debt, net of current portion                   42,795     37,120
                                                      ---------  ---------
Total liabilities                                       204,420    186,205
Equity:
Common stock, $0.0001 par value, 45,000,000 shares
 authorized; 30,402,285 and 30,337,109 shares issued
 and 29,746,173 and 29,681,031 shares outstanding
 (net of treasury shares), respectively                       3          3
Additional paid-in capital                              378,326    377,210
Tax benefit from stock-based compensation                 4,609      4,547
Accumulated other comprehensive loss                    (17,149)   (17,230)
Accumulated deficit                                     (39,621)   (49,998)
Less: treasury stock at cost; 656,112 shares as of
 November 30, 2009 and 656,078 as of August 31, 2009    (14,135)   (14,134)
                                                      ---------  ---------
Total PriceSmart stockholders' equity                   312,033    300,398
Noncontrolling interest                                     804        770
                                                      ---------  ---------
Total equity                                            312,837    301,168
                                                      ---------  ---------
Total Liabilities and Equity                          $ 517,257  $ 487,373
                                                      =========  =========

Contact Information

  • For further information, please contact:

    Robert E. Price
    Chief Executive Officer
    (858) 551-2336

    John M. Heffner
    Executive Vice President and Chief Financial Officer
    (858) 404-8826