SOURCE: PriceSmart, Inc.

PriceSmart, Inc.

April 08, 2010 08:00 ET

PriceSmart Announces Second Quarter Results of Operations, March Sales and the Relocation of a Warehouse Club

SAN DIEGO, CA--(Marketwire - April 8, 2010) -  PriceSmart, Inc. (NASDAQ: PSMT) (www.pricesmart.com) today announced its results of operations for the second quarter of fiscal year 2010 which ended on February 28, 2010.

For the second quarter of fiscal year 2010, net warehouse sales increased 9.3% to $358.9 million from $328.2 million in the second quarter of fiscal year 2009. Total revenue for the second quarter was $366.1 million compared to $334.8 million in the prior year. The Company had 26 clubs in operation as of February 2010 and 25 clubs in operation as of February 2009.

The Company recorded operating income in the quarter of $20.4 million, compared to operating income of $17.5 million in the prior year. Net income attributable to PriceSmart was $13.7 million, or $0.46 per diluted share, in the second quarter of fiscal 2010 compared to $12.7 million, or $0.43 per diluted share, in the second quarter of fiscal 2009.

For the first six months of fiscal year 2010, net warehouse club sales increased 6.5% to $667.5 million from $626.8 million in the first six months of fiscal year 2009. Total revenues for the first half of the fiscal year increased 6.5% to $681.5 million from $640.0 million in the same period of the prior year. For the first six months of fiscal year 2010, the Company recorded operating income of $36.7 million and net income attributable to PriceSmart of $24.1 million, or $0.81 per diluted share. During the same six month period in fiscal year 2009, the Company recorded operating income of $32.4 million and net income attributable to PriceSmart of $23.4 million, or $0.79 per share.

The Company also announced that for the month of March 2010 net sales increased 18.6% to $119.4 million, from $100.7 million in March a year earlier. For the seven months ended March 31, 2010, net sales increased 8.2% to $786.9 million from $727.5 million for the seven months ended March 31, 2009. There were 26 warehouse clubs in operation at the end of March 2010 and 25 warehouse clubs in operation at the end of March 2009. The Company believes that March sales growth was positively impacted by the Easter holiday occurring on April 4, compared to last year when it occurred on April 12.

For the four weeks ended March 28, 2010 comparable warehouse sales for the warehouse clubs open at least 12 full months increased 12.0%, compared to the same four-week period last year. For the thirty-week period ended March 28, 2010 comparable warehouse sales increased 4.1%, compared to the comparable thirty-week period a year ago.

PriceSmart also announced the relocation of one of its three warehouse clubs in Panama City, Panama (the Los Pueblos Club) to the recently completed new warehouse club at a nearby site, opening on April 9, 2010. The Company will continue to operate four warehouse clubs in Panama.

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 may encounter difficulties in the shipment of and risks inherent in the importation of merchandise to its warehouse clubs; the Company is exposed to weather and other natural disaster 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     Six Months Ended  
    February 28,     February 28,     February 28,     February 28,  
    2010     2009     2010     2009  
Revenues:                        
Net warehouse club sales   $ 358,893     $ 328,240     $ 667,545     $ 626,758  
Export sales     1,006       905       1,593       1,742  
Membership income     4,827       4,425       9,476       8,749  
Other income     1,396       1,223       2,926       2,753  
Total revenues     366,122       334,793       681,540       640,002  
Operating expenses:                                
Cost of goods sold:                                
Net warehouse club     304,867       279,993       566,584       534,419  
Export     935       861       1,489       1,661  
Selling, general and administrative:                                
Warehouse club operations     31,041       28,544       60,274       55,829  
General and administrative     8,667       7,812       16,235       15,352  
Pre-opening expenses     175       99       286       99  
Asset impairment and closure costs     --       16       --       264  
Total operating expenses     345,685       317,325       644,868       607,624  
Operating income     20,437       17,468       36,672       32,378  
Other income (expense):                                
Interest income     122       115       338       241  
Interest expense     (634 )     (609 )     (1,264 )     (1,190 )
Other expense, net     (10 )     (42 )     (7 )     (62 )
Total other expense     (522 )     (536 )     (933 )     (1,011 )
Income from continuing operations before provision for income taxes, and loss of unconsolidated affiliates     19,915       16,932       35,739       31,367  
Provision for income taxes     (6,190 )     (4,090 )     (11,592 )     (7,737 )
Loss of unconsolidated affiliates     (3 )     (7 )     (5 )     (12 )
Income from continuing operations     13,722       12,835       24,142       23,618  
Income (loss) from discontinued operations, net of tax     35       (63 )     44       (81 )
Net income     13,757       12,772       24,186       23,537  
Net loss attributable to noncontrolling interest     (60 )     (85 )     (112 )     (150 )
Net income attributable to PriceSmart   $ 13,697     $ 12,687     $ 24,074     $ 23,387  
                                 
Net income attributable to PriceSmart:                                
Income from continuing operations     13,662       12,750       24,030       23,468  
Income (loss) from discontinued operations, net of tax     35       (63 )     44       (81 )
    $ 13,697     $ 12,687     $ 24,074     $ 23,387  
Net income per share attributable to PriceSmart and available for distribution:                                
Basic net income per share from continuing operations   $ 0.46     $ 0.43     $ 0.81     $ 0.80  
Basic net income per share from discontinued operations, net of tax   $ --     $ --     $ --     $ --  
Basic net income per share   $ 0.46     $ 0.43     $ 0.81     $ 0.80  
                                 
Diluted net income per share from continuing operations   $ 0.46     $ 0.43     $ 0.81     $ 0.79  
Diluted net income per share from discontinued operations, net of tax   $ --     $ --     $ --     $ --  
Diluted net income per share   $ 0.46     $ 0.43     $ 0.81     $ 0.79  
Shares used in per share computations:                                
Basic     29,222       28,916       29,163       28,888  
Diluted     29,250       29,179       29,206       29,145  
Dividends per share   $ 0.50     $ 0.50     $ 0.50     $ 0.50  
                                 
                                 

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

    February 28, 2010 (Unaudited)     August 31, 2009  
ASSETS              
Current Assets:              
Cash and cash equivalents   $ 63,047     $ 44,193  
Short-term restricted cash     --       10  
Receivables, net of allowance for doubtful accounts of $8 and $10 as of February 28, 2010 and August 31, 2009, respectively     2,454       2,187  
Merchandise inventories     124,077       115,841  
Deferred tax assets - current     2,800       2,618  
Prepaid expenses and other current assets     15,982       19,033  
Assets of discontinued operations     820       900  
Total current assets     209,180       184,782  
Long-term restricted cash     823       732  
Property and equipment, net     251,398       231,798  
Goodwill     37,455       37,538  
Deferred tax assets - long term     19,168       20,938  
Other assets     3,982       3,927  
Investment in unconsolidated affiliates     8,097       7,658  
Total Assets   $ 530,103     $ 487,373  
LIABILITIES AND EQUITY                
Current Liabilities:                
Short-term borrowings   $ 4,344     $ 2,303  
Accounts payable     113,097       101,412  
Accrued salaries and benefits     7,878       8,831  
Deferred membership income     9,490       8,340  
Income taxes payable     5,785       5,942  
Other accrued expenses     8,718       10,022  
Dividends payable     7,429       --  
Long-term debt, current portion     6,002       4,590  
Deferred tax liability - current     200       189  
Liabilities of discontinued operations     109       299  
Total current liabilities     163,052       141,928  
Deferred tax liability - long-term     1,091       1,026  
Long-term portion of deferred rent     2,902       2,673  
Long-term income taxes payable, net of current portion     3,545       3,458  
Long-term debt, net of current portion     47,127       37,120  
Total liabilities     217,717       186,205  
Equity:                
Common stock, $0.0001 par value, 45,000,000 shares authorized; 30,463,930 and 30,337,109 shares issued and 29,741,523 and 29,681,031 shares outstanding (net of treasury shares) as of February 28, 2010 and August 31, 2009, respectively     3       3  
Additional paid-in capital     380,147       377,210  
Tax benefit from stock-based compensation     4,724       4,547  
Accumulated other comprehensive loss     (17,108 )     (17,230 )
Accumulated deficit     (40,786 )     (49,998 )
Less: treasury stock at cost; 722,407 and 656,078 shares as of February 28, 2010 and August 31, 2009, respectively.     (15,460 )     (14,134 )
Total PriceSmart stockholders' equity     311,520       300,398  
Noncontrolling interest     866       770  
Total equity     312,386       301,168  
Total Liabilities and Equity   $ 530,103     $ 487,373  

Contact Information

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

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