SOURCE: PriceSmart, Inc.

PriceSmart, Inc.

April 04, 2012 16:00 ET

PriceSmart Announces Second Quarter Results of Operations

SAN DIEGO, CA--(Marketwire - Apr 4, 2012) - PriceSmart, Inc. (NASDAQ: PSMT) (www.pricesmart.com) today announced its results of operations for the second quarter of fiscal year 2012 which ended on February 29, 2012.

For the second quarter of fiscal year 2012, net warehouse club sales increased 22.2% to $537.8 million from $440.3 million in the second quarter of fiscal year 2011. Total revenues for the second quarter of fiscal year 2012 were $549.8 million compared to $449.6 million in the comparable period of the prior year. The Company had 29 clubs in operation as of February 2012 and 28 clubs in operation as of February 2011.

The Company recorded operating income during the quarter of $30.3 million, as compared to operating income of $26.7 million in the prior year. Net income attributable to PriceSmart was $20.2 million, or $0.67 per diluted share, in the second quarter of fiscal year 2012 as compared to $17.9 million, or $0.60 per diluted share, in the second quarter of fiscal year 2011.

For the first six months of fiscal year 2012, net warehouse club sales increased 23.1% to $1,006.1 million from $817.6 million in the first six months of fiscal year 2011. Total revenues for the first half of fiscal year 2012 increased 23.1% to $1,028.5 million from $835.7 million in the same period of the prior year. For the first six months of fiscal year 2012, the Company recorded operating income of $54.6 million and net income attributable to PriceSmart of $34.2 million, or $1.14 per diluted share. During the same six month period in fiscal year 2011, the Company recorded operating income of $48.9 million and net income attributable to PriceSmart of $32.8 million, or $1.11 per diluted share.

PriceSmart management will host a conference call at 12:00 p.m. Eastern time (9:00 a.m. Pacific time) on Thursday, April 5, 2012, to discuss the financial results. Individuals interested in participating in the conference call may do so by dialing (888) 282-4056 toll free, and entering participant code 2522346. A digital replay will be available through April 30, 2012, 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 2522346.

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 29 warehouse clubs in 12 countries and one U.S. territory (five in Costa Rica; four each in Panama and Trinidad; three each in Guatemala and the Dominican Republic; two each in El Salvador and Honduras; and one each in Aruba, Barbados, Colombia, 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; future sales growth could be dependent upon the Company acquiring suitable sites for additional warehouse clubs; 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 approximately 31.1% 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 Amendment No. 1 to Annual Report on Form 10-K/A for the fiscal year ended August 31, 2011, filed pursuant to the Securities Exchange Act of 1934 on January 9, 2012. 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 29,
2012
February 28,
2011
February 29,
2012
February 28,
2011
Revenues:
Net warehouse club sales $ 537,816 $ 440,263 $ 1,006,145 $ 817,595
Export sales 3,459 1,872 5,708 3,280
Membership income 6,393 5,576 12,724 11,001
Other income 2,165 1,906 3,941 3,813
Total revenues 549,833 449,617 1,028,518 835,689
Operating expenses:
Cost of goods sold:
Net warehouse club 459,313 375,027 859,794 693,215
Export 3,292 1,758 5,453 3,102
Selling, general and administrative:
Warehouse club operations 46,384 37,239 88,893 72,373
General and administrative 10,508 8,874 19,619 17,684
Pre-opening expenses (1 ) (15 ) 161 388
Total operating expenses 519,496 422,883 973,920 786,762
Operating income 30,337 26,734 54,598 48,927
Other income (expense):
Interest income 205 239 389 367
Interest expense (1,317 ) (1,071 ) (2,571 ) (2,028 )
Other income (expense), net 832 194 (437 ) 526
Total other expense (280 ) (638 ) (2,619 ) (1,135 )
Income from continuing operations before provision for income taxes and loss of unconsolidated affiliates 30,057 26,096 51,979 47,792
Provision for income taxes (9,843 ) (8,049 ) (17,776 ) (14,894 )
Income (loss) of unconsolidated affiliates 3 (37 ) 10 (42 )
Income from continuing operations 20,217 18,010 34,213 32,856
Income (loss) from discontinued operations, net of tax 3 (93 ) (4 ) (86 )
Net income 20,220 17,917 34,209 32,770
Net income per share available for distribution:
Basic net income per share from continuing operations $ 0.67 $ 0.60 $ 1.14 $ 1.11
Basic net income (loss) per share from discontinued operations, net of tax $ -- $ -- $ -- $ --
Basic net income per share $ 0.67 $ 0.60 $ 1.14 $ 1.11
Diluted net income per share from continuing operations $ 0.67 $ 0.60 $ 1.14 $ 1.11
Diluted net income (loss) per share from discontinued operations, net of tax $ -- $ -- $ -- $ --
Diluted net income per share $ 0.67 $ 0.60 $ 1.14 $ 1.11
Shares used in per share computations:
Basic 29,541 29,414 29,522 29,385
Diluted 29,553 29,423 29,535 29,392
Dividends per share $ 0.60 $ 0.60 $ 0.60 $ 0.60
PRICESMART, INC.
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
February 29, 2012
(Unaudited)
August 31,
2011
ASSETS
Current Assets:
Cash and cash equivalents $ 90,799 $ 76,817
Short-term restricted cash 1,288 1,240
Receivables, net of allowance for doubtful accounts of $8 and $5 as of February 29, 2012 and August 31, 2011, respectively 4,114 3,655
Merchandise inventories 179,904 177,232
Deferred tax assets - current 4,550 4,252
Prepaid expenses and other current assets 32,401 29,117
Assets of discontinued operations 46 464
Total current assets 313,102 292,777
Long-term restricted cash 36,662 22,626
Property and equipment, net 282,264 281,111
Goodwill 37,221 37,361
Deferred tax assets - long term 15,134 17,000
Other non-current assets 5,560 5,390
Investment in unconsolidated affiliates 7,584 8,063
Total Assets $ 697,527 $ 664,328
LIABILITIES AND EQUITY
Current Liabilities:
Short-term borrowings $ 135 $ 2,259
Accounts payable 167,418 163,432
Accrued salaries and benefits 11,052 11,681
Deferred membership income 13,185 11,416
Income taxes payable 7,754 7,655
Other accrued expenses 11,573 12,556
Dividends payable 9,063 --
Long-term debt, current portion 7,282 7,771
Deferred tax liability - current 364 533
Liabilities of discontinued operations 2 40
Total current liabilities 227,828 217,343
Deferred tax liability - long-term 1,615 1,888
Long-term portion of deferred rent 4,297 4,143
Long-term income taxes payable, net of current portion 3,380 3,310
Long-term debt, net of current portion 76,396 60,451
Other long-term liabilities (includes $2.2 million and $884,000 for the fair value of derivative instruments and $561,000 and $471,000 for the defined benefit plan as of February 29, 2012 and August 31, 2011, respectively) 2,760 1,355
Total liabilities 316,276 288,490
Equity:
Common stock, $0.0001 par value, 45,000,000 shares authorized; 30,840,358 and 30,695,933 shares issued and 30,199,395 and 29,900,030 shares outstanding (net of treasury shares) as of February 29, 2012 and August 31, 2011 3 3
Additional paid-in capital 381,037 383,549
Tax benefit from stock-based compensation 5,880 5,242
Accumulated other comprehensive loss (33,828 ) (22,915 )
Retained earnings 44,324 28,238
Less: treasury stock at cost; 640,963 and 795,903 shares as of February 29, 2012 and August 31, 2011. (16,165 ) (18,279 )
Total equity 381,251 375,838
Total Liabilities and Equity $ 697,527 $ 664,328

Contact Information

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