SOURCE: PriceSmart, Inc.

PriceSmart, Inc.

April 07, 2011 08:00 ET

PriceSmart Announces Second Quarter Results of Operations and March Sales

SAN DIEGO, CA--(Marketwire - April 7, 2011) - PriceSmart, Inc. (NASDAQ: PSMT) (www.pricesmart.com) today announced its results of operations for the second quarter of fiscal year 2011 which ended on February 28, 2011.

For the second quarter of fiscal year 2011, net warehouse club sales increased 22.7% to $440.3 million from $358.9 million in the second quarter of fiscal year 2010. Total revenues for the second quarter of fiscal year 2011 were $449.6 million compared to $366.1 million in the prior year. The Company had 28 clubs in operation as of February 2011 and 26 clubs in operation as of February 2010.

The Company recorded operating income during the quarter of $27.2 million, as compared to operating income of $20.4 million in the prior year. Net income attributable to PriceSmart was $17.9 million, or $0.60 per diluted share, in the second quarter of fiscal year 2011 as compared to $13.7 million, or $0.46 per diluted share, in the second quarter of fiscal year 2010.

For the first six months of fiscal year 2011, net warehouse club sales increased 22.5% to $817.6 million from $667.5 million in the first six months of fiscal year 2010. Total revenues for the first half of fiscal year 2011 increased 22.6% to $835.7 million from $681.5 million in the same period of the prior year. For the first six months of fiscal year 2011, the Company recorded operating income of $49.8 million and net income attributable to PriceSmart of $32.8 million, or $1.11 per diluted share. During the same six month period in 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.

The Company also announced that for the month of March 2011, net warehouse club sales increased 16.6% to $139.2 million, from $119.4 million in March a year earlier. For the seven months ended March 31, 2011, net warehouse club sales increased 21.6% to $956.8 million from $786.9 million for the seven months ended March 31, 2010. There were 28 warehouse clubs in operation at the end of March 2011 and 26 warehouse clubs in operation at the end of March 2010.

For the four weeks ended April 3, 2011, comparable net warehouse club sales for the warehouse clubs open at least 13 1/2 full months increased 16.7%, compared to the same four-week period last year. For the thirty-week period ended April 3, 2011, comparable net warehouse club sales increased 16.9%, compared to the comparable thirty-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     Six Months Ended  
  February 28,     February 28,  
  2011       2010     2011     2010  
Revenues:                          
Net warehouse club sales $ 440,263     $ 358,893     $ 817,595     $ 667,545  
Export sales   1,872       1,006       3,280       1,593  
Membership income   5,576       4,827       11,001       9,476  
Other income   1,906       1,396       3,813       2,926  
Total revenues   449,617       366,122       835,689       681,540  
Operating expenses:                              
Cost of goods sold:                              
  Net warehouse club   374,573       304,867       692,386       566,584  
  Export   1,758       935       3,102       1,489  
Selling, general and administrative:                              
Warehouse club operations   37,239       31,041       72,373       60,274  
General and administrative   8,874       8,667       17,684       16,235  
Pre-opening expenses   (15 )     175       388       286  
Total operating expenses   422,429       345,685       785,933       644,868  
Operating income   27,188       20,437       49,756       36,672  
Other income (expense):                              
Interest income   239       122       367       338  
Interest expense   (1,071 )     (634 )     (2,028 )     (1,264 )
Other income (expense), net   (260 )     (10 )     (303 )     (7 )
Total other expense   (1,092 )     (522 )     (1,964 )     (933 )
Income from continuing operations before provision for income taxes and loss of unconsolidated affiliates  
26,096
     
19,915
      47,792       35,739  
Provision for income taxes   (8,049 )     (6,190 )     (14,894 )     (11,592 )
Loss of unconsolidated affiliates   (37 )     (3 )     (42 )     (5 )
Income from continuing operations   18,010       13,722       32,856       24,142  
Income (loss) from discontinued operations, net of tax   (93 )     35       (86 )     44  
Net income   17,917       13,757       32,770       24,186  
Net income attributable to noncontrolling interest   --       (60 )     --       (112 )
Net income attributable to PriceSmart $ 17,917     $ 13,697     $ 32,770     $ 24,074  
                               
Net income attributable to PriceSmart:                              
Income from continuing operations   18,010       13,662       32,856       24,030  
Income (loss) from discontinued operations, net of tax   (93 )     35       (86 )     44  
  $ 17,917     $ 13,697     $ 32,770     $ 24,074  
Net income per share attributable to PriceSmart and available for distribution:                              
Basic net income per share from continuing operations $ 0.60     $ 0.46     $ 1.11     $ 0.81  
Basic net income (loss) per share from discontinued operations, net of tax
$

--
   
$

--
    $ --     $ --  
Basic net income per share $ 0.60     $ 0.46     $ 1.11     $ 0.81  
                               
Diluted net income per share from continuing operations $ 0.60     $ 0.46     $ 1.11     $ 0.81  
Diluted net income (loss) per share from discontinued operations, net of tax
$

--
   
$

--
    $ --     $ --  
Diluted net income per share $ 0.60     $ 0.46     $ 1.11     $ 0.81  
Shares used in per share computations:                              
Basic   29,414       29,222       29,385       29,163  
Diluted   29,423       29,250       29,392       29,206  
Dividends per share $ 0.60     $ 0.50     $ 0.60     $ 0.50  
                               
             
PRICESMART, INC.
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
      
             
   February 28,        
   2011     August 31,  
   (Unaudited)     2010  
ASSETS            
Current Assets:            
Cash and cash equivalents $ 70,659     $ 73,346  
Short-term restricted cash   1,240       1,240  
Receivables, net of allowance for doubtful accounts of $16 and $15 as of February 28, 2011 and August 31, 2010, respectively.   3,167       2,855  
Merchandise inventories   151,692       131,190  
Deferred tax assets - current   4,086       3,639  
Prepaid expenses and other current assets   24,031       21,879  
Assets of discontinued operations   803       692  
Total current assets   255,678       234,841  
Long-term restricted cash   13,670       5,640  
Property and equipment, net   280,919       265,544  
Goodwill   37,533       37,471  
Deferred tax assets - long term   15,344       16,637  
Other assets   4,301       4,341  
Investment in unconsolidated affiliates   8,061       8,091  
Total Assets $ 615,506     $ 572,565  
LIABILITIES AND EQUITY              
Current Liabilities:              
Short-term borrowings $ 2,984     $ 3,551  
Accounts payable   142,567       124,401  
Accrued salaries and benefits   9,442       10,911  
Deferred membership income   11,014       9,729  
Income taxes payable   6,216       6,615  
Other accrued expenses   11,490       12,095  
Dividends payable   8,969       --  
Long-term debt, current portion   7,761       7,715  
Deferred tax liability - current   425       357  
Liabilities of discontinued operations   212       109  
Total current liabilities   201,080       175,483  
Deferred tax liability - long-term   1,718       1,198  
Long-term portion of deferred rent   3,744       3,272  
Long-term income taxes payable, net of current portion   3,361       3,564  
Long-term debt, net of current portion   54,185       53,005  
Total liabilities   264,088       236,522  
Equity:              
Common stock, $0.0001 par value, 45,000,000 shares authorized; 30,688,399 and 30,624,666 shares issued and 29,896,805 and 29,897,909 shares outstanding (net of treasury shares) as of February 28, 2011 and August 31, 2010, respectively.   3       3  
Additional paid-in capital   381,436       379,368  
Tax benefit from stock-based compensation   5,371       4,490  
Accumulated other comprehensive loss   (16,565 )     (16,672 )
Accumulated deficit   (746 )     (15,578 )
Less: treasury stock at cost; 791,594 and 726,757 shares as of February 28, 2011 and August 31, 2010, respectively.   (18,081 )     (15,568 )
Total PriceSmart stockholders' equity and total equity   351,418       336,043  
Total Liabilities and Equity $ 615,506     $ 572,565  
               

Contact Information

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