SOURCE: PriceSmart, Inc.

PriceSmart, Inc.

January 05, 2017 16:00 ET

PriceSmart Announces First Quarter Results of Operations for Fiscal Year 2017

SAN DIEGO, CA--(Marketwired - Jan 5, 2017) - PriceSmart, Inc. (NASDAQ: PSMT) today announced its results of operations for the first quarter of fiscal year 2017 which ended on November 30, 2016.

For the first quarter of fiscal year 2017, net warehouse club sales increased 3.7% to $716.1 million from $690.8 million in the first quarter of fiscal year 2016. Total revenues for the first quarter of fiscal year 2017 were $739.6 million compared to $711.9 million in the first quarter of the prior year. The Company had 39 clubs in operation as of November 30, 2016, compared to 38 warehouse clubs in operation as of November 30, 2015.

The Company recorded operating income for the first quarter of $38.4 million, compared to operating income of $37.3 million for the first quarter of the prior year. Net income was $24.9 million, or $0.82 per diluted share, in the first quarter of fiscal year 2017. Net income in the first quarter of fiscal year 2016 was $23.7 million, or $0.78 per diluted share.

PriceSmart management plans to host a conference call at 12:00 p.m. Eastern time (9:00 a.m. Pacific time) on Friday, January 6, 2017, to discuss the financial results. Individuals interested in participating in the conference call may do so by dialing (877) 675-4756 toll free, or (719) 325-4810 for international callers, and entering participant code 5691450. A digital replay will be available through January 31, 2017, following the conclusion of the call by dialing (888) 203-1112 for domestic callers, or (719) 457-0820 for international callers, and entering relay passcode 5691450.

About PriceSmart

PriceSmart, headquartered in San Diego, owns and operates U.S.-style membership shopping warehouse clubs in Latin America and the Caribbean, selling high quality merchandise at low prices to PriceSmart members. PriceSmart now operates 39 warehouse clubs in 12 countries and one U.S. territory (seven in Colombia; six in Costa Rica; five in Panama; four in Trinidad; three each in Guatemala, the Dominican Republic and Honduras; two each in El Salvador and Nicaragua; and one each in Aruba, Barbados, Jamaica 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, proposed warehouse club openings, the Company's performance relative to competitors, the outcome of tax proceedings and related matters. These forward-looking statements include, but are not limited to, statements containing the words "expect," "believe," "will," "may," "should," "project," "estimate," "anticipated," "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: our financial performance is dependent on international operations, which exposes us to various risks; any failure by us to manage our widely dispersed operations could adversely affect our business; we face significant competition; future sales growth depends, in part, on our ability to successfully open new warehouse clubs and grow sales in our existing locations; we might not identify in a timely manner or effectively respond to changes in consumer preferences for merchandise, which could adversely affect our relationship with members, demand for our products and market share; although we have begun to offer limited online shopping to our members, our sales could be adversely affected if one or more major international online retailers were to enter our markets or if other competitors were to offer a superior online experience; our profitability is vulnerable to cost increases; we face difficulties in the shipment of and risks inherent in the importation of, merchandise to our warehouse clubs; we are exposed to weather and other natural disaster risks that might not be adequately compensated by insurance; general economic conditions could adversely impact our business in various respects; our failure to maintain our brand and reputation could adversely affect our results of operations; we are subject to risks associated with possible changes in our relationships with third parties with which we do business, as well as the performance of such third parties; we rely extensively on computer systems to process transactions, summarize results and manage our business, and failure to adequately maintain our systems and disruptions in our systems could harm our business and adversely affect our results of operations; we could be subject to additional tax liabilities or subject to reserves on the recoverability of tax receivables; a few of our stockholders own approximately 25.3% of our voting stock as of August 31, 2016, which may make it difficult to complete some corporate transactions without their support and may impede a change in control; failure to attract and retain qualified employees, increases in wage and benefit costs, changes in laws and other labor issues could materially adversely affect our financial performance; we face the possibility of operational interruptions related to union work stoppages; we are subject to volatility in foreign currency exchange rates and limits on our ability to convert foreign currencies into U.S. dollars; we face the risk of exposure to product liability claims, a product recall and adverse publicity; any failure to maintain the security of the information relating to our company, members, employees and vendors that we hold, whether as a result of cybersecurity attacks on our information systems, failure of internal controls, employee negligence or malfeasance or otherwise, could damage our reputation with members, employees, vendors and others, could disrupt our operations, could cause us to incur substantial additional costs and to become subject to litigation and could materially adversely affect our operating results; we are subject to payment related risks; changes in accounting standards and assumptions, projections, estimates and judgments by management related to complex accounting matters could significantly affect our financial condition and results of operations; we face compliance risks related to our international operations; if remediation costs or hazardous substance contamination levels at certain properties for which we maintain financial responsibility exceed management's current expectations, our financial condition and results of operations could be adversely impacted. The risks described above as well as the other risks detailed in the Company's U.S. Securities and Exchange Commission ("SEC") reports, including the Company's Annual Report on Form 10-K filed for the fiscal year ended August 31, 2016 filed on October 27, 2016 pursuant to the Securities Exchange Act of 1934. 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,     November 30,  
  2016     2015  
Revenues:              
Net warehouse club sales $ 716,079     $ 690,831  
Export sales   10,734       8,232  
Membership income   11,710       11,466  
Other income   1,049       1,402  
Total revenues   739,572       711,931  
Operating expenses:              
Cost of goods sold:              
Net warehouse club   608,490       590,183  
Export   10,181       7,832  
Selling, general and administrative:              
Warehouse club operations   65,426       60,840  
General and administrative   16,802       15,463  
Pre-opening expenses   (113 )     305  
Loss/(gain) on disposal of assets   407       13  
Total operating expenses   701,193       674,636  
Operating income   38,379       37,295  
Other income (expense):              
Interest income   502       178  
Interest expense   (1,654 )     (1,373 )
Other income (expense), net   (928 )     (244 )
Total other income (expense)   (2,080 )     (1,439 )
Income before provision for income taxes and income (loss) of unconsolidated affiliates   36,299       35,856  
Provision for income taxes   (11,437 )     (12,130 )
Income (loss) of unconsolidated affiliates   7       (54 )
Net income $ 24,869       23,672  
Net income per share available for distribution:              
Basic net income per share $ 0.82     $ 0.78  
Diluted net income per share $ 0.82     $ 0.78  
Shares used in per share computations:              
Basic   29,982       29,890  
Diluted   29,987       29,896  
Dividends per share $ --     $ --  
               
               
               
PRICESMART, INC.  
CONSOLIDATED BALANCE SHEETS  
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)  
           
           
  November 30,        
  2016     August 31,  
  (Unaudited)     2016  
ASSETS              
Current Assets:              
Cash and cash equivalents $ 175,402     $ 199,522  
Short-term restricted cash   517       518  
Receivables, net of allowance for doubtful accounts of $7 as of November 30, 2016 and August 31, 2016, respectively   7,761       7,464  
Merchandise inventories   326,989       282,907  
Prepaid expenses and other current assets   24,194       22,143  
Total current assets   534,863       512,554  
Long-term restricted cash   2,735       2,676  
Property and equipment, net   469,423       473,045  
Goodwill   35,603       35,637  
Deferred tax assets   11,783       12,258  
Other non-current assets (includes $4,163 and $3,224 as of November 30, 2016 and August 31, 2016, respectively, for the fair value of derivative instruments)   52,690       49,798  
Investment in unconsolidated affiliates   10,773       10,767  
Total Assets $ 1,117,870     $ 1,096,735  
LIABILITIES AND EQUITY              
Current Liabilities:              
Short-term borrowings $ 12,211     $ 16,534  
Accounts payable   280,601       267,173  
Accrued salaries and benefits   17,645       19,606  
Deferred membership income   20,905       20,920  
Income taxes payable   4,892       4,226  
Other accrued expenses (includes $153 and $110 as of November 30, 2016 and August 31, 2016, respectively, for the fair value of foreign currency forward contracts)   25,450       24,880  
Long-term debt, current portion   14,664       14,565  
Total current liabilities   376,368       367,904  
Deferred tax liability   1,647       1,760  
Long-term portion of deferred rent   8,759       8,961  
Long-term income taxes payable, net of current portion   883       970  
Long-term debt, net of current portion   69,788       73,542  
Other long-term liabilities (includes $1,030 and $1,514 for the fair value of derivative instruments and $4,394 and $4,013 for post employment plans as of November 30, 2016 and August 31, 2016, respectively)   5,424       5,527  
Total Liabilities   462,869       458,664  
               
Equity:              
Common stock $0.0001 par value, 45,000,000 shares authorized; 31,242,784 and 31,237,658 shares issued and 30,406,433 and 30,401,307 shares outstanding (net of treasury shares) as of November 30, 2016 and August 31, 2016, respectively   3       3  
Additional paid-in capital   414,811       412,369  
Tax benefit from stock-based compensation   11,321       11,321  
Accumulated other comprehensive loss   (114,332 )     (103,951 )
Retained earnings   375,929       351,060  
Less: treasury stock at cost, 836,351 shares as of November 30, 2016 and August 31, 2016, respectively   (32,731 )     (32,731 )
Total Equity   655,001       638,071  
Total Liabilities and Equity $ 1,117,870     $ 1,096,735  
               

Contact Information

  • For further information, please contact
    John M. Heffner
    Principal Financial Officer and Principal Accounting
    Officer
    (858) 404-8826