SOURCE: PriceSmart, Inc.

PriceSmart, Inc.

January 07, 2011 08:00 ET

PriceSmart Announces First Quarter Results of Operations; December Sales Also Announced

SAN DIEGO, CA--(Marketwire - January 7, 2011) - PriceSmart, Inc. (NASDAQ: PSMT) (www.pricesmart.com) today announced its results of operations for the first quarter of fiscal year 2011 which ended on November 30, 2010.

For the first quarter of fiscal year 2011, net warehouse sales increased 22.3% to $377.3 million from $308.7 million in the first quarter of fiscal year 2010. Total revenue for the first quarter was $386.1 million compared to $315.4 million in the prior year. The Company had 28 clubs in operation as of November 30, 2010, compared to 26 warehouse clubs in operation as of November 30, 2009.

The Company recorded operating income in the quarter of $22.6 million, compared to operating income of $16.2 million in the prior year. Net income attributable to PriceSmart was $14.9 million, or $0.50 per diluted share, in the first quarter of fiscal year 2011. Net income attributable to PriceSmart in the first quarter of fiscal year 2010 was $10.4 million, or $0.35 per diluted share. The Company will release its quarterly report on Form 10-Q for the first quarter of fiscal year 2011 on or before January 10, 2011.

The Company also announced that for the month of December 2010, net sales increased 22.0% to $185.4 million from $152.1 million in December a year earlier. For the four months ended December 31, 2010, net sales increased 22.2% to $562.8 million from $460.7 million in the same period last year. There were 28 warehouse clubs in operation at the end of December 2010 compared to 26 warehouse clubs in operation in December 2009.

For the four weeks ended January 2, 2011, comparable warehouse sales for warehouse clubs open at least 12 full months increased 15.6% compared to the same four-week period last year. For the seventeen-week period ended January 2, 2011, comparable warehouse sales increased 16.5% 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 28 warehouse clubs in 11 countries and one U.S. territory (five in Costa Rica; four each in Panama and Trinidad; three each in Guatemala and Dominican Republic, two each in 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," "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: 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 its business; the Company faces significant competition; the Company may encounter difficulties in the shipment of, and risks inherent in the acquisition and importation of, merchandise to its warehouse clubs; the Company is exposed to weather and other natural disaster risks; 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 39% 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; although the Company takes steps to continuously review, enhance, and implement improvements to its internal controls, there may be material weaknesses or significant deficiencies that the Company has not yet identified; 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 year ended August 31, 2010 filed pursuant to the Securities Exchange Act of 1934 on November 9, 2010. 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,
                                                      --------------------
                                                        2010       2009
                                                      ---------  ---------
Revenues:
Net warehouse club sales                              $ 377,331  $ 308,653
Export sales                                              1,409        587
Membership income                                         5,425      4,649
Other income                                              1,907      1,530
                                                      ---------  ---------
Total revenues                                          386,072    315,419
                                                      ---------  ---------
Operating expenses:
Cost of goods sold:
Net warehouse club                                      317,813    261,717
Export                                                    1,344        554
Selling, general and administrative:
Warehouse club operations                                35,133     29,234
General and administrative                                8,810      7,568
Pre-opening expenses                                        403        111
                                                      ---------  ---------
Total operating expenses                                363,503    299,184
                                                      ---------  ---------
Operating income                                         22,569     16,235
Other income (expense):
Interest income                                             129        215
Interest expense                                           (956)      (630)
Other income (expense), net                                 (46)         4
                                                      ---------  ---------
Total other expense                                        (873)      (411)
                                                      ---------  ---------
Income from continuing operations before provision
 for income taxes and loss of unconsolidated
 affiliates                                              21,696     15,824
Provision for income taxes                               (6,845)    (5,401)
Loss of unconsolidated affiliates                            (5)        (2)
                                                      ---------  ---------
Income from continuing operations                        14,846     10,421
Income from discontinued operations, net of tax               7          9
                                                      ---------  ---------
Net income                                               14,853     10,430
                                                      ---------  ---------
Net income attributable to noncontrolling interest           --        (53)
                                                      ---------  ---------
Net income attributable to PriceSmart                 $  14,853  $  10,377
                                                      =========  =========

Net income attributable to PriceSmart:
Income from continuing operations                        14,846     10,368
Income (loss) from discontinued operations, net of
 tax                                                          7          9
                                                      ---------  ---------
                                                      $  14,853  $  10,377
                                                      =========  =========
Net income per share attributable to PriceSmart and
 available for distribution:
Basic net income per share from continuing operations $    0.50  $    0.35
Basic net income (loss) per share from discontinued
 operations, net of tax                               $    0.00  $    0.00
                                                      ---------  ---------
Basic net income per share                            $    0.50  $    0.35
                                                      =========  =========

Diluted net income per share from continuing
 operations                                           $    0.50  $    0.35
Diluted net income (loss) per share from discontinued
 operations, net of tax                               $    0.00  $    0.00
                                                      ---------  ---------
Diluted net income per share                          $    0.50  $    0.35
                                                      =========  =========
Shares used in per share computations:
Basic                                                    29,356     29,105
                                                      =========  =========
Diluted                                                  29,362     29,163
                                                      =========  =========
Dividends per share                                   $    0.00  $    0.00
                                                      =========  =========




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

                                                November 30,
                                                    2010       August 31,
                                                (Unaudited)       2010
                                                ------------  ------------
ASSETS
Current Assets:
Cash and cash equivalents                       $     48,454  $     73,346
Short-term restricted cash                             1,240         1,240
Receivables, net of allowance for doubtful
 accounts of $17 and $15 as of November 30 and
 August 31, 2010, respectively.                        3,669         2,855
Merchandise inventories                              169,355       131,190
Deferred tax assets - current                          4,494         3,639
Prepaid expenses and other current assets             25,400        21,879
Assets of discontinued operations                        924           692
                                                ------------  ------------
Total current assets                                 253,536       234,841
Long-term restricted cash                             13,631         5,640
Property and equipment, net                          277,467       265,544
Goodwill                                              37,445        37,471
Deferred tax assets - long term                       15,361        16,637
Other assets                                           4,369         4,341
Investment in unconsolidated affiliates                8,092         8,091
                                                ------------  ------------
Total Assets                                    $    609,901  $    572,565
                                                ============  ============
LIABILITIES AND EQUITY
Current Liabilities:
Short-term borrowings                           $      3,972  $      3,551
Accounts payable                                     143,813       124,401
Accrued salaries and benefits                         10,798        10,911
Deferred membership income                             9,999         9,729
Income taxes payable                                   4,054         6,615
Other accrued expenses                                12,805        12,095
Long-term debt, current portion                        7,734         7,715
Deferred tax liability - current                         409           357
Liabilities of discontinued operations                   115           109
                                                ------------  ------------
Total current liabilities                            193,699       175,483
Deferred tax liability - long-term                     1,554         1,198
Long-term portion of deferred rent                     3,525         3,272
Long-term income taxes payable, net of current
 portion                                               3,654         3,564
Long-term debt, net of current portion                55,783        53,005
                                                ------------  ------------
Total liabilities                                    258,215       236,522
Equity:
Common stock, $0.0001 par value, 45,000,000
 shares authorized; 30,625,666 and 30,624,666
 shares issued and 29,898,909 and 29,897,909
 shares outstanding (net of treasury shares) as
 of November 30 and August 31, 2010,
 respectively.                                             3             3
Additional paid-in capital                           380,307       379,368
Tax benefit from stock-based compensation              4,489         4,490
Accumulated other comprehensive loss                 (16,820)      (16,672)
Accumulated deficit                                     (725)      (15,578)
Less: treasury stock at cost; 726,757 and
 726,757 shares as of November 30 and August
 31, 2010, respectively.                             (15,568)      (15,568)
                                                ------------  ------------
Total PriceSmart stockholders' equity and total
 equity                                              351,686       336,043
                                                ------------  ------------
Total Liabilities and Equity                    $    609,901  $    572,565
                                                ============  ============

Contact Information

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