SOURCE: PriceSmart, Inc.

PriceSmart, Inc.

November 09, 2010 08:00 ET

PriceSmart Announces Fourth Quarter and Fiscal Year Results of Operations

SAN DIEGO, CA--(Marketwire - November 9, 2010) - PriceSmart, Inc. (NASDAQ: PSMT) (www.pricesmart.com) today announced its results of operations for the fourth quarter and fiscal year 2010 which ended on August 31, 2010.

For the fourth quarter of fiscal year 2010, net warehouse sales were $357.0 million compared to $298.0 million in the fourth quarter of fiscal year 2009. Total revenue for the fourth quarter was $365.7 million compared to $305.1 million in the prior year. The Company had 27 warehouse clubs in operation as of the end of fiscal year 2010 compared to 26 warehouse clubs in operation at the end of fiscal year 2009.

Operating income in the fourth quarter of fiscal year 2010 was $20.1 million compared to operating income of $11.9 million in the fourth quarter of fiscal year 2009.

The Company recorded net income attributable to PriceSmart for the fourth quarter of $13.2 million or $0.44 per diluted share compared to net income attributable to PriceSmart of $10.3 million or $0.34 per diluted share in the fourth quarter of fiscal year 2009.

Net warehouse sales increased 11.6% to $1.4 billion during fiscal year 2010 compared to $1.2 billion in the prior year, and total revenue for fiscal year 2010 increased 11.5% to $1.4 billion from $1.3 billion in fiscal year 2009. For fiscal year 2010, the Company recorded operating income of $74.9 million and net income attributable to PriceSmart of $49.3 million, or $1.65 per diluted share. For fiscal year 2009, the Company recorded operating income of $57.5 million and net income attributable to PriceSmart of $42.3 million or $1.43(1) per diluted share.

Commenting on the results, PriceSmart's Chief Executive Officer and President Jose Luis Laparte said, "I am pleased to note that the Company experienced improved comparable sales growth trends through much of fiscal 2010, notwithstanding some weakness early in the year. During the fiscal year we successfully opened our fourth warehouse club in Trinidad and relocated one of our Panama City warehouse clubs to a new location. We also entered into an agreement to acquire land in Barranquilla, Colombia upon which we plan to construct our first warehouse club in that country. As we begin fiscal year 2011, our positive sales growth trend has continued during the first two months. Last week (on November 5, 2010) we successfully opened our third warehouse club in the Dominican Republic and we are hopeful that we can open our first Colombian warehouse club by the end of fiscal year 2011."

The Company will file its Annual Report on Form 10-K for the year ended August 31, 2010 on or before November 9, 2010.

(1) Effective September 1, 2009, the Company adopted FASB guidance which addresses whether instruments granted in share-based payment transactions are participating securities and, therefore, have a potential dilutive effect on earnings per share ("EPS"). This guidance was applied retrospectively to all periods presented.

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 Quarterly Report on Form 10-Q filed for the quarter ended May 31, 2010 filed pursuant to the Securities Exchange Act of 1934 on July 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
              (amounts in thousands, except per share data)



                           Three Months Ended       Twelve Months Ended
                               August 31,                August 31,
                        ------------------------  ------------------------
                            2010         2009         2010         2009
                        -----------  -----------  -----------  -----------
Revenues:
Net warehouse club
 sales                  $   357,040  $   298,002  $ 1,365,801  $ 1,224,331
Export sales                  1,678          900        4,139        3,679
Membership income             5,210        4,635       19,742       17,903
Other income                  1,806        1,546        6,209        5,715
                        -----------  -----------  -----------  -----------
Total revenues              365,734      305,083    1,395,891    1,251,628
                        -----------  -----------  -----------  -----------
Operating expenses:
Cost of goods sold:
Net warehouse club          301,501      254,282    1,156,374    1,044,555
Export                        1,576          855        3,890        3,484
Selling, general and
 administrative:
Warehouse club
 operations                  34,165       30,936      126,274      114,957
General and
 administrative               8,332        7,537       33,319       30,882
Pre-opening expenses             (3)          72        1,123          515
Asset impairment and
 closure costs (income)          18         (465)          18         (249)
                        -----------  -----------  -----------  -----------
Total operating
 expenses                   345,589      293,217    1,320,998    1,194,144
                        -----------  -----------  -----------  -----------
Operating income             20,145       11,866       74,893       57,484
Other income (expense):
Interest income                  94          140          553          457
Interest expense               (864)         175       (2,723)      (1,700)
Other expense, net             (237)        (503)        (483)        (539)
                        -----------  -----------  -----------  -----------
Total other expense          (1,007)        (188)      (2,653)      (1,782)
                        -----------  -----------  -----------  -----------
Income from continuing
 operations before
 provision for income
 taxes and loss of
 unconsolidated
 affiliates                  19,138       11,678       72,240       55,702
Provision for income
 taxes                       (5,887)      (1,372)     (22,787)     (13,069)
Loss of unconsolidated
 affiliates                     (11)          (1)         (22)         (21)
                        -----------  -----------  -----------  -----------
Income from continuing
 operations                  13,240       10,305       49,431       42,612
Income (loss) from
 discontinued
 operations, net of tax         (24)          (1)          16          (28)
                        -----------  -----------  -----------  -----------
Net income              $    13,216  $    10,304  $    49,447  $    42,584
                        ===========  ===========  ===========  ===========
Net income attributable
 to noncontrolling
 interests                       --          (53)        (132)        (265)
                        -----------  -----------  -----------  -----------
Net income attributable
 to PriceSmart          $    13,216  $    10,251  $    49,315  $    42,319
                        ===========  ===========  ===========  ===========

Net income attributable
 to PriceSmart:
Income from continuing
 operations             $    13,240  $    10,252  $    49,299  $    42,347
Income (loss) from
 discontinued
 operations, net of tax         (24)          (1)          16          (28)
                        -----------  -----------  -----------  -----------
                        $    13,216  $    10,251  $    49,315  $    42,319
                        ===========  ===========  ===========  ===========
Net income per share
 attributable to
 PriceSmart and
 available for
 distribution:
Basic net income per
 share from continuing
 operations             $      0.44  $      0.35  $      1.66  $      1.43
Basic net income per
 share from
 discontinued
 operations, net of tax $        --  $        --  $        --  $        --
                        -----------  -----------  -----------  -----------
Basic net income per
 share                  $      0.44  $      0.35  $      1.66  $      1.43
                        ===========  ===========  ===========  ===========

Diluted net income per
 share from continuing
 operations             $      0.44  $      0.34  $      1.65  $      1.43
Diluted net income per
 share from
 discontinued
 operations, net of tax $        --  $        --  $        --  $        --
                        -----------  -----------  -----------  -----------
Diluted net income per
 share                  $      0.44  $      0.34  $      1.65  $      1.43
                        ===========  ===========  ===========  ===========
Shares used in per
 share computations:
Basic                        29,351       29,046       29,254       28,959
                        ===========  ===========  ===========  ===========
Diluted                      29,356       29,127       29,279       29,057
                        ===========  ===========  ===========  ===========
Dividends per share     $        --  $        --  $      0.50  $      0.50
                        ===========  ===========  ===========  ===========





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



                                                           August 31,
                                                      --------------------
                                                        2010       2009
                                                      ---------  ---------
ASSETS
Current Assets:
Cash and cash equivalents                             $  73,346  $  44,193
Short-term restricted cash                                1,240         10
Receivables, net of allowance for doubtful accounts
 of $15 and $10 as of August 31, 2010 and 2009,
 respectively                                             2,855      2,187
Merchandise inventories                                 131,190    115,841
Deferred tax assets - current                             3,639      2,618
Prepaid expenses and other current assets                21,879     19,033
Assets of discontinued operations                           692        900
                                                      ---------  ---------
Total current assets                                    234,841    184,782
Long-term restricted cash                                 5,640        732
Property and equipment, net                             265,544    231,798
Goodwill                                                 37,471     37,538
Deferred tax assets - long term                          16,637     20,938
Other assets                                              4,341      3,927
Investment in unconsolidated affiliates                   8,091      7,658
                                                      ---------  ---------
Total Assets                                          $ 572,565  $ 487,373
                                                      =========  =========
LIABILITIES AND EQUITY
Current Liabilities:
Short-term borrowings                                 $   3,551  $   2,303
Accounts payable                                        124,401    101,412
Accrued salaries and benefits                            10,911      8,831
Deferred membership income                                9,729      8,340
Income taxes payable                                      6,615      5,942
Other accrued expenses                                   12,095     10,022
Long-term debt, current portion                           7,715      4,590
Deferred tax liability - current                            357        189
Liabilities of discontinued operations                      109        299
                                                      ---------  ---------
Total current liabilities                               175,483    141,928
Deferred tax liability - long-term                        1,198      1,026
Long-term portion of deferred rent                        3,272      2,673
Long-term income taxes payable, net of current
 portion                                                  3,564      3,458
Long-term debt, net of current portion                   53,005     37,120
                                                      ---------  ---------
Total liabilities                                       236,522    186,205
Equity:
Common stock, $0.0001 par value, 45,000,000 shares
 authorized; 30,624,666 and 30,337,109 shares issued
 and 29,897,909 and 29,681,031 shares outstanding
 (net of treasury shares) as of August 31, 2010 and
 2009, respectively.                                          3          3
Additional paid-in capital                              379,368    377,210
Tax benefit from stock-based compensation                 4,490      4,547
Accumulated other comprehensive loss                    (16,672)   (17,230)
Accumulated deficit                                     (15,578)   (49,998)
Less: treasury stock at cost; 726,757 and 656,078
 shares as of August 31, 2010 and 2009, respectively.   (15,568)   (14,134)
                                                      ---------  ---------
Total PriceSmart stockholders' equity                   336,043    300,398
Noncontrolling interest                                      --        770
                                                      ---------  ---------
Total equity                                            336,043    301,168
                                                      ---------  ---------
Total Liabilities and Equity                          $ 572,565  $ 487,373
                                                      =========  =========

Contact Information

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