SOURCE: PriceSmart, Inc.

PriceSmart, Inc.

January 07, 2016 16:00 ET

PriceSmart Announces First Quarter Results of Operations for Fiscal Year 2016 and December Sales

SAN DIEGO, CA--(Marketwired - Jan 7, 2016) -  PriceSmart, Inc. (NASDAQ: PSMT) today announced its results of operations for the first quarter of fiscal year 2016 which ended on November 30, 2015.

For the first quarter of fiscal year 2016, net warehouse club sales increased 8.6% to $690.8 million from $636.4 million in the first quarter of fiscal year 2015. Total revenues for the first quarter of fiscal year 2016 were $711.9 million compared to $656.0 million in the first quarter of the prior year. The Company had 38 clubs in operation as of November 30, 2015, compared to 36 warehouse clubs in operation as of November 30, 2014.

The Company recorded operating income for the first quarter of $37.3 million, compared to operating income of $36.3 million for the first quarter of the prior year. Net income was $23.7 million, or $0.78 per diluted share, in the first quarter of fiscal year 2016. Net income in the first quarter of fiscal year 2015 was $20.6 million, or $0.68 per diluted share.

For the month of December 2015, net sales increased 3.7% to $319.1 million from $307.8 million in December a year earlier. For the four months ended December 31, 2015, net sales increased 7.0% to $1,010.0 million from $944.2 million in the same period last year. There were 38 warehouse clubs in operation at the end of December 2015 compared to 36 warehouse clubs in operation in December 2014.

For the four weeks ended December 27, 2015, comparable warehouse sales for the 33 warehouse clubs open at least 13 1/2 full months increased 1.3% compared to the same four-week period last year. For the seventeen-week period ended December 27, 2015, comparable warehouse sales increased 1.6% compared to the comparable seventeen-week period a year ago.

Comparable warehouse sales were negatively impacted by the devaluation of the Colombian peso from the year ago period. Three warehouse clubs in Colombia are in the calculation for comparable warehouse sales. Excluding those warehouse clubs, the four-week and seventeen-week comparable warehouse sales for the other 30 warehouse clubs open at least 13 1/2 full months increased 3.6% and 4.6%, respectively.

PriceSmart management plans to host a conference call at 12:00 p.m. Eastern time (9:00 a.m. Pacific time) on Friday, January 8, 2016, to discuss the financial results. Individuals interested in participating in the conference call may do so by dialing (877) 675-4757 toll free, or (719) 325-4838 for international callers, and entering participant code 6532245. A digital replay will be available through January 31, 2016, 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 6532245.

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 38 warehouse clubs in 12 countries and one U.S. territory (six each in Costa Rica and Colombia; 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 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 inherent risks in the importation of, merchandise to our warehouse clubs; we are exposed to weather and other natural disaster risks; general economic conditions could adversely impact our business in various respects; 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; 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; a few of our stockholders own approximately 27.8% of our voting stock as of November 30, 2015, 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 are subject to volatility in foreign currency exchange rates; 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 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, estimates and judgments by management related to complex accounting matters could significantly affect our financial condition and results of operations; we face increased public company compliance risks and 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, 2015 filed on October 29, 2015 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,  
    2015     2014  
Revenues:                
Net warehouse club sales   $ 690,831     $ 636,415  
Export sales     8,232       8,431  
Membership income     11,466       10,115  
Other income     1,402       1,060  
Total revenues     711,931       656,021  
Operating expenses:                
Cost of goods sold:                
Net warehouse club     590,183       539,028  
Export     7,832       8,027  
Selling, general and administrative:                
Warehouse club operations     60,840       56,210  
General and administrative     15,463       13,350  
Pre-opening expenses     305       3,149  
Loss/(gain) on disposal of assets     13       (28 )
Total operating expenses     674,636       619,736  
Operating income     37,295       36,285  
Other income (expense):                
Interest income     178       264  
Interest expense     (1,373 )     (1,174 )
Other income (expense), net     (244 )     (2,632 )
Total other income (expense)     (1,439 )     (3,542 )
Income before provision for income taxes and income (loss) of unconsolidated affiliates     35,856       32,743  
Provision for income taxes     (12,130 )     (12,102 )
Income (loss) of unconsolidated affiliates     (54 )     6  
Net income     23,672     $ 20,647  
Net income per share available for distribution:                
Basic net income per share   $ 0.78     $ 0.68  
Diluted net income per share   $ 0.78     $ 0.68  
Shares used in per share computations:                
Basic     29,890       29,791  
Diluted     29,896       29,799  
Dividends per share   $ --     $ --  
                 
                 
                 
PRICESMART, INC.  
CONSOLIDATED BALANCE SHEETS  
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)  
   
    November 30,
 2015
(Unaudited)
    August 31, 2015  
ASSETS            
Current Assets:                
Cash and cash equivalents   $ 140,006     $ 157,072  
Short-term restricted cash     60       61  
Receivables, net of allowance for doubtful accounts of $0 as of November 30, 2015 and August 31, 2015, respectively     7,691       9,662  
Merchandise inventories     322,623       267,175  
Deferred tax assets - current     8,229       7,849  
Prepaid expenses and other current assets     28,735       22,535  
Total current assets     507,344       464,354  
Long-term restricted cash     2,063       1,464  
Property and equipment, net     443,062       433,040  
Goodwill     35,846       35,871  
Deferred tax assets - long term     7,016       7,464  
Other non-current assets (includes $4,208 and $4,129 as of November 30, 2015 and August 31, 2015, respectively, for the fair value of derivative instruments)     41,881       39,182  
Investment in unconsolidated affiliates     10,382       10,317  
Total Assets   $ 1,047,594     $ 991,692  
LIABILITIES AND EQUITY                
Current Liabilities:                
Short-term borrowings   $ 1,935     $ 6,606  
Accounts payable     275,908       241,978  
Accrued salaries and benefits     16,396       17,977  
Deferred membership income     20,383       20,184  
Income taxes payable     7,777       9,595  
Other accrued expenses (includes $129 and $66 as of November 30, 2015 and August 31, 2015, respectively, for the fair value of foreign currency forward contracts)     23,450       23,558  
Long-term debt, current portion     15,986       17,169  
Deferred tax liability - current     18       30  
Total current liabilities     361,853       337,097  
Deferred tax liability - long-term     2,117       2,193  
Long-term portion of deferred rent     7,264       6,595  
Long-term income taxes payable, net of current portion     1,358       1,402  
Long-term debt, net of current portion     78,437       73,365  
Other long-term liabilities (includes $1,650 and $1,699 for the fair value of derivative instruments and $3,155 and $2,757 for post employment plans as of November 30, 2015 and August 31, 2015, respectively)     4,805       4,456  
Total liabilities     455,834       425,108  
Equity:                
Common stock, $0.0001 par value, 45,000,000 shares authorized; 31,164,162 and 30,977,764 shares issued and 30,370,982 and 30,184,584 shares outstanding (net of treasury shares) as of November 30, 2015 and August 31, 2015, respectively     3       3  
Additional paid-in capital     405,268       403,168  
Tax benefit from stock-based compensation     10,711       10,711  
Accumulated other comprehensive loss     (102,108 )     (101,512 )
Retained earnings     307,283       283,611  
Less: treasury stock at cost; 793,180 shares as of November 30, 2015 and August 31, 2015     (29,397 )     (29,397 )
Total equity     591,760       566,584  
Total Liabilities and Equity   $ 1,047,594     $ 991,692  

Contact Information

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