SOURCE: PriceSmart, Inc.

PriceSmart, Inc.

November 06, 2009 08:00 ET

PriceSmart Announces Fourth Quarter and Fiscal Year Results of Operations; October Sales Also Announced

SAN DIEGO, CA--(Marketwire - November 6, 2009) - PriceSmart, Inc. (NASDAQ: PSMT) (www.pricesmart.com) today announced its results of operations for the fourth quarter and fiscal year 2009 which ended on August 31, 2009.

For the fourth quarter of fiscal year 2009, net warehouse sales were $298.0 million compared to $286.1 million in the fourth quarter of fiscal year 2008. Total revenue for the fourth quarter was $305.1 million compared to $292.0 million in the prior year. The Company had 26 warehouse clubs in operation as of the end of fiscal year 2009 compared to 25 warehouse clubs in operation at the end of fiscal year 2008.

Operating income in the fourth quarter of fiscal year 2009 was $11.9 million compared to operating income of $12.9 million in the fourth quarter of fiscal year 2008.

The Company recorded net income for the fourth quarter of $10.3 million or $0.35 per diluted share compared to net income of $11.3 million or $0.39 per diluted share in the fourth quarter of fiscal year 2008. In the fourth quarter of fiscal year 2009, the Company realized a reduction to tax expense in the period of $3.8 million or $0.13 per diluted share, compared to a reduction to tax expense of $3.5 million, or $0.12 per diluted share, in the fourth quarter fiscal year 2008.

Net warehouse sales increased 11.6% to $1.2 billion during fiscal year 2009 compared to $1.1 billion in the prior year, and total revenue for fiscal year 2009 increased 11.8% to $1.3 billion from $1.1 billion in fiscal year 2008. For fiscal year 2009, the Company recorded operating income of $57.5 million and net income of $42.3 million, or $1.45 per diluted share. For fiscal year 2008 the Company recorded net income of $38.1 million or $1.30 per diluted share.

Commenting on the results, PriceSmart President Jose Luis Laparte said, "Despite the difficult time in the world economies we were able to accomplish positive growth for the quarter and full year in both total sales and sales on a same warehouse club basis. During the year we successfully opened our fifth club in Costa Rica and completed the expansion of one club in Nicaragua adding 8,600 square feet. Also during the year, the Company substantially completed the expansion of our Aruba warehouse club, adding 9,000 square feet. This expansion was opened to our members in September 2009. Our plans in the new fiscal year include the opening of our fourth warehouse club in Trinidad and a relocation in Panama of our Los Pueblos warehouse club. We will also continue our evaluation of Colombia as a potential new market for multiple PriceSmart warehouse clubs. In addition, because we were not able to obtain the necessary permits to acquire land we had under contract in Santo Domingo, Dominican Republic, we are actively looking for a new site in the Santo Domingo market. Fiscal year 2010 will still present some challenges until we see a full recovery of the economies in the countries where we have warehouse clubs, but we believe that PriceSmart is in a good position to face those challenges with the talent and dedication of our team and the value we bring to our 651,000 members."

The Company will file its Annual Report on Form 10-K for the year ended August 31, 2009 on or before November 16, 2009.

PriceSmart also announced that for the month of October 2009, net sales increased 4.9% to $104.1 million from $99.3 million in October a year earlier. For the two months ended October 31, 2009, net sales increased 3.7% to $200.0 million from $192.9 million in the same period last year. There were 26 warehouse clubs in operation at the end of October 2009, compared to 25 warehouse clubs in operation in October 2008.

For the four weeks ended October 25, 2009, comparable warehouse sales for warehouse clubs open at least 12 full months decreased 0.3% compared to the same four-week period last year. For the eight-week period ended October 25, 2009, comparable warehouse sales decreased 0.7% compared to the comparable eight 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 one-half 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 12, 2008. 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
               (amounts in thousands, except per share data)


                             Three Months Ended      Twelve Months Ended
                                 August 31,              August 31,
                           ----------------------- -----------------------
                              2009        2008        2009        2008
                           ----------- ----------- ----------- -----------
Revenues:
     Net warehouse club
      sales                $   298,002 $   286,126 $ 1,224,331 $ 1,097,510
     Export sales                  900         406       3,679       1,498
     Membership income           4,635       4,231      17,903      16,042
     Other income                1,546       1,193       5,715       4,826
                           ----------- ----------- ----------- -----------
       Total revenues          305,083     291,956   1,251,628   1,119,876
                           ----------- ----------- ----------- -----------
Operating expenses:
     Cost of goods sold:
     Net warehouse club        254,282     242,376   1,044,555     932,294
     Export                        855         387       3,484       1,420
     Selling, general and
      administrative:
     Warehouse club
      operations                30,936      28,141     114,957     103,887
     General and
      administrative             7,537       7,686      30,882      30,327
     Pre-opening expenses           72          14         515       1,010
     Asset impairment and
      closure costs               (465)        439        (249)      1,142
     Provision for
      settlement of
      litigation, including
      changes in fair value
      and put agreement             --          26          --       1,370
                           ----------- ----------- ----------- -----------
       Total operating
        expenses               293,217     279,069   1,194,144   1,071,450
                           ----------- ----------- ----------- -----------
Operating income                11,866      12,887      57,484      48,426
Other income (expense):
     Interest income               140         165         457       1,193
     Interest expense              175        (479)     (1,700)     (1,445)
     Other expense, net           (503)       (131)       (539)       (346)
                           ----------- ----------- ----------- -----------
       Total other expense        (188)       (445)     (1,782)       (598)
                           ----------- ----------- ----------- -----------
Income from continuing
 operations before
 provision for income
 taxes, loss of
 unconsolidated affiliates
 and minority interest          11,678      12,442      55,702      47,828
Provision for income taxes      (1,372)       (844)    (13,069)     (9,124)
Loss of unconsolidated
 affiliates                         (1)         --         (21)         --
Minority interest                  (53)       (128)       (265)       (494)
                           ----------- ----------- ----------- -----------
Income from continuing
 operations                     10,252      11,470      42,347      38,210
Loss from discontinued
 operations, net of tax             (1)       (175)        (28)       (104)
                           ----------- ----------- ----------- -----------
Net income                 $    10,251 $    11,295 $    42,319 $    38,106
                           =========== =========== =========== ===========

Basic net income per share
 from continuing
 operations                $      0.35 $      0.39 $      1.46 $      1.32
Basic net loss per share
 from discontinued
 operations, net of tax    $        -- $        -- $        -- $        --
                           ----------- ----------- ----------- -----------
Basic net income per share $      0.35 $      0.39 $      1.46 $      1.32

Diluted net income per
 share from continuing
 operations                $      0.35 $      0.39 $      1.45 $      1.30
Diluted net loss per share
 from discontinued
 operations, net of tax    $        -- $        -- $        -- $        --
                           ----------- ----------- ----------- -----------
Diluted net income per
 share                     $      0.35 $      0.39 $      1.45 $      1.30
Shares used in per share
 computations:
     Basic                      29,046      28,897      28,959      28,860
                           =========== =========== =========== ===========
     Diluted                    29,228      29,192      29,181      29,210
                           =========== =========== =========== ===========
     Dividends per
      share                $        -- $        -- $      0.50 $      0.32
                           =========== =========== =========== ===========




                               PRICESMART, INC.

                        CONSOLIDATED BALANCE SHEETS
                 (amounts in thousands, except share data)


                                                         August 31,
                                                  ------------------------
                                                     2009         2008
ASSETS
Current Assets:
Cash and cash equivalents                         $    44,193  $    48,121
Short-term restricted cash                                 10          536
Receivables, net of allowance for doubtful
 accounts of $10 and $11 in 2009 and 2008,
 respectively                                           2,187        1,474
Merchandise inventories                               115,841      113,894
Deferred tax asset - current                            2,618        2,179
Prepaid expenses and other current assets              19,033       17,650
Short-term notes receivable                                --        2,104
Assets of discontinued operations                         900        1,247
                                                  -----------  -----------
Total current assets                                  184,782      187,205
Long-term restricted cash                                 732          673
Property and equipment, net                           231,798      199,576
Goodwill                                               37,538       39,248
Deferred tax assets - long term                        20,938       21,198
Other assets                                            3,927        3,512
Investment in unconsolidated affiliates                 7,658           --
                                                  -----------  -----------
Total Assets                                      $   487,373  $   451,412
                                                  ===========  ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Short-term borrowings                             $     2,303  $     3,473
Accounts payable                                      101,412      96,120
Accrued salaries and benefits                           8,831        8,271
Deferred membership income                              8,340        7,764
Income taxes payable                                    5,942        3,695
Common stock subject to put agreement                      --          161
Other accrued expenses                                 10,022       11,877
Dividend payable                                           --        4,744
Long-term debt, current portion                         4,590        2,737
Deferred tax liability - current                          189          486
Liabilities of discontinued operations                    299          277
                                                  -----------  -----------
Total current liabilities                             141,928      139,605
Deferred tax liability - long-term                      1,026        2,339
Long term portion of deferred rent                      2,673        2,412
Accrued closure costs                                      --        3,489
Long-term income taxes payable, net of current
 portion                                                3,458        5,553
Long-term debt, net of current portion                 37,120       23,028
                                                  -----------  -----------
Total liabilities                                     186,205      176,426
Minority interest                                         770          480
Stockholders' Equity:
Common stock, $0.0001 par value, 45,000,000
 shares authorized; 30,337,109 and 30,195,788
 shares issued and 29,681,031 and 29,615,226
 shares outstanding (net of treasury shares),
 respectively                                               3            3
Additional paid-in capital                            377,210      373,192
Tax benefit from stock-based compensation               4,547        4,563
Accumulated other comprehensive loss                  (17,230)     (12,897)
Accumulated deficit                                   (49,998)     (77,510)
Less: treasury stock at cost; 656,078 and
 580,562 shares, respectively                        (14,134)      (12,845)
                                                  -----------  -----------
Total stockholders' equity                            300,398      274,506
                                                  -----------  -----------
Total Liabilities and Stockholders' Equity        $   487,373  $   451,412
                                                  ===========  ===========

Contact Information

  • For further information, please contact
    Robert E. Price
    Chief Executive Officer
    (858) 551-2336

    or

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