SOURCE: PriceSmart, Inc.

PriceSmart, Inc.

July 09, 2010 08:00 ET

PriceSmart Announces Third Quarter Results of Operations and June 2010 Sales

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

For the third quarter of fiscal year 2010, net warehouse sales increased 13.9% to $341.2 million from $299.6 million in the third quarter of fiscal year 2009. Total revenue for the third quarter was $348.6 million compared to $306.5 million in the prior year. The Company had 27 warehouse clubs in operation as of May 2010 compared to 26 warehouse clubs in 2009.

The Company recorded operating income in the quarter of $18.1 million, compared to operating income of $13.2 million in the prior year. Net income was $12.0 million, or $0.40 per diluted share, in the third quarter of fiscal 2010 compared to $8.7 million, or $0.29 per diluted share, in the third quarter of fiscal 2009.

For the first nine months of fiscal year 2010, net warehouse club sales increased 8.9% to $1,008.8 million from $926.3 million in the first nine months of fiscal year 2009. Total revenues for the first nine months of the fiscal year increased 8.8% to $1,030.2 million from $946.5 million in the same period of the prior year. For the first nine months of fiscal year 2010, the Company recorded operating income of $54.7 million and net income of $36.1 million, or $1.21 per diluted share. During the same nine month period in fiscal year 2009, the Company recorded operating income of $45.6 million and net income of $32.1 million, or $1.08 per diluted share.

The Company also announced that for the month of June 2010 net sales increased 19.0% to $113.9 million, from $95.7 million in June a year earlier. For the ten months ended June 30, 2010, net sales increased 9.8% to $1,122.6 million from $1,022.0 million for the ten months ended June 30, 2009. There were 27 warehouse clubs in operation at the end of June 2010 and 26 warehouse clubs in operation at the end of June 2009.

For the four weeks ended June 27, 2010, comparable warehouse sales for the warehouse clubs open at least 12 full months increased 14.5%, compared to the same four-week period last year. For the forty-three week period ended June 27, 2010, comparable ware­house sales increased 6.4%, compared to the comparable forty-three 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 27 warehouse clubs in 11 countries and one U.S. territory (five in Costa Rica; four each in Panama and Trinidad; three in Guatemala, two each in Dominican Republic, 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," "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 the Company's business; the Company faces difficulties in the shipment of and inherent risks in the acquisition and importation of merchandise to its warehouse clubs; the Company is exposed to weather and other natural disaster risks associated with international operations; 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 40% 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; and the Company faces increased compliance risks associated with compliance with Section 404 of the Sarbanes-Oxley Act of 2002; as well as the other risks detailed in the Company's SEC reports, including the Company's Annual Report on Form 10-K filed pursuant to the Securities Exchange Act of 1934 on November 9, 2009. 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.

For further information, please contact Robert E. Price, Principal Executive Officer (858) 551-2336; or John M. Heffner, Executive Vice President and Principal Financial Officer (858) 404-8826.

             
PRICESMART, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED—AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
             
    Three Months Ended     Nine Months Ended  
    May 31,     May 31,  
    2010     2009     2010     2009  
Revenues:                        
Net warehouse club sales   $ 341,215     $ 299,571     $ 1,008,760     $ 926,329  
Export sales     868       1,038       2,461       2,779  
Membership income     5,056       4,518       14,532       13,268  
Other income     1,477       1,417       4,404       4,169  
Total revenues     348,616       306,544       1,030,157       946,545  
Operating expenses:                                
Cost of goods sold:                                
Net warehouse club     288,289       255,854       854,873       790,273  
Export     825       968       2,314       2,629  
Selling, general and administrative:                                
Warehouse club operations     31,834       28,197       92,109       84,025  
General and administrative     8,752       7,989       24,987       23,341  
Pre-opening expenses     840       344       1,126       443  
Asset impairment and closure costs (income)     --       (48 )     --       216  
Total operating expenses     330,540       293,304       975,409       900,927  
Operating income     18,076       13,240       54,748       45,618  
Other income (expense):                                
Interest income     122       76       460       317  
Interest expense     (595 )     (685 )     (1,859 )     (1,875 )
Other income (expense), net     (240 )     26       (247 )     (36 )
Total other expense     (713 )     (583 )     (1,646 )     (1,594 )
Income from continuing operations before provision for income taxes and loss of unconsolidated affiliates     17,363       12,657       53,102       44,024  
Provision for income taxes     (5,309 )     (3,960 )     (16,901 )     (11,697 )
Loss of unconsolidated affiliates     (6 )     (8 )     (11 )     (20 )
Income from continuing operations     12,048       8,689       36,190       32,307  
Income (loss) from discontinued operations, net of tax     (4 )     55       40       (27 )
Net income     12,044       8,744       36,230       32,280  
Net loss attributable to noncontrolling interest     (20 )     (61 )     (132 )     (211 )
Net income attributable to PriceSmart   $ 12,024     $ 8,683     $ 36,098     $ 32,069  
                                 
Net income attributable to PriceSmart:                                
Income from continuing operations     12,028       8,628       36,058       32,096  
Income (loss) from discontinued operations, net of tax     (4 )     55       40       (27 )
    $ 12,024     $ 8,683     $ 36,098     $ 32,069  
Net income per share attributable to PriceSmart and available for distribution:                                
Basic net income per share from continuing operations   $ 0.40     $ 0.29     $ 1.21     $ 1.09  
Basic net income (loss) per share from discontinued operations, net of tax   $ 0.00     $ 0.00     $ 0.00     $ 0.00  
Basic net income per share   $ 0.40     $ 0.29     $ 1.21     $ 1.09  
                                 
Diluted net income per share from continuing operations   $ 0.40     $ 0.29     $ 1.21     $ 1.08  
Diluted net income (loss) per share from discontinued operations, net of tax   $ 0.00     $ 0.00     $ 0.00     $ 0.00  
Diluted net income per share   $ 0.40     $ 0.29     $ 1.21     $ 1.08  
Shares used in per share computations:                                
Basic     29,336       29,010       29,221       28,929  
Diluted     29,345       29,108       29,253       29,032  
Dividends per share   $ 0.00     $ 0.00     $ 0.50     $ 0.50  
                                 
               
PRICESMART, INC.
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
             
    May 31,
2010
(Unaudited)
    August 31,
2009
 
ASSETS              
Current Assets:              
Cash and cash equivalents   $ 55,091     $ 44,193  
Short-term restricted cash     1,200       10  
Receivables, net of allowance for doubtful accounts of $6 and $10 as of May 31, 2010 and August 31, 2009, respectively     2,572       2,187  
Merchandise inventories     133,059       115,841  
Deferred tax assets - current     3,219       2,618  
Prepaid expenses and other current assets     18,337       19,033  
Assets of discontinued operations     980       900  
Total current assets     214,458       184,782  
Long-term restricted cash     5,665       732  
Property and equipment, net     259,619       231,798  
Goodwill     37,533       37,538  
Deferred tax assets - long term     18,019       20,938  
Other assets     4,195       3,927  
Investment in unconsolidated affiliates     8,096       7,658  
Total Assets   $ 547,585     $ 487,373  
LIABILITIES AND EQUITY                
Current Liabilities:                
Short-term borrowings   $ 3,618     $ 2,303  
Accounts payable     113,494       101,412  
Accrued salaries and benefits     9,637       8,831  
Deferred membership income     9,433       8,340  
Income taxes payable     6,199       5,942  
Other accrued expenses     11,057       10,022  
Dividends payable     7,429       --  
Long-term debt, current portion     7,222       4,590  
Deferred tax liability - current     183       189  
Liabilities of discontinued operations     117       299  
Total current liabilities     168,389       141,928  
Deferred tax liability - long-term     1,088       1,026  
Long-term portion of deferred rent     3,005       2,673  
Long-term income taxes payable, net of current portion     3,303       3,458  
Long-term debt, net of current portion     50,151       37,120  
Total liabilities     225,936       186,205  
Equity:                
Common stock, $0.0001 par value, 45,000,000 shares authorized; 30,580,686 and 30,337,109 shares issued and 29,855,630 and 29,681,031 shares outstanding (net of treasury shares) as of May 31, 2010 and August 31, 2009, respectively.     3       3  
Additional paid-in capital     378,381       377,210  
Tax benefit from stock-based compensation     4,501       4,547  
Accumulated other comprehensive loss     (16,952 )     (17,230 )
Accumulated deficit     (28,762 )     (49,998 )
Less: treasury stock at cost; 725,056 and 656,078 shares as of May 31, 2010 and August 31, 2009, respectively.     (15,522 )     (14,134 )
Total PriceSmart stockholders' equity     321,649       300,398  
Noncontrolling interest     --       770  
Total equity     321,649       301,168  
Total Liabilities and Equity   $ 547,585     $ 487,373  

Contact Information

  • Contacts:
    Robert E. Price
    Principal Executive Officer
    (858) 551-2336

    John M. Heffner
    Executive Vice President and Principal Financial Officer
    (858) 404-8826