SOURCE: PriceSmart, Inc.

PriceSmart, Inc.

July 09, 2015 16:00 ET

PriceSmart Announces Third Quarter Results of Operations and June Sales; Opening of New Warehouse Club in Panama Also Announced

SAN DIEGO, CA--(Marketwired - Jul 9, 2015) -  PriceSmart, Inc. (NASDAQ: PSMT) today announced its results of operations for the third quarter of fiscal year 2015 which ended on May 31, 2015.

For the third quarter of fiscal year 2015, net warehouse club sales increased 13.0% to $675.3 million from $597.9 million in the third quarter of fiscal year 2014. Total revenues for the third quarter of fiscal year 2015 were $697.1 million compared to $615.0 million in the comparable period of the prior year. The Company had 36 warehouse clubs in operation as of May 2015 compared to 33 warehouse clubs in operation as of May 2014.

The Company recorded operating income during the quarter of $33.5 million, as compared to operating income of $31.2 million in the prior year. Net income was $21.2 million, or $0.70 per diluted share, in the third quarter of fiscal year 2015 as compared to $21.3 million, or $0.70 per diluted share, in the third quarter of fiscal year 2014.

For the first nine months of fiscal year 2015, net warehouse club sales increased 10.8% to $2,043.8 million from $1,844.7 million in the first nine months of fiscal year 2014. Total revenues for the first nine months of the fiscal year 2015 increased 11.0% to $2,103.4 million from $1,895.0 million in the same period of the prior year. For the first nine months of fiscal year 2015, the Company recorded operating income of $111.5 million and net income of $66.7 million, or $2.20 per diluted share. During the nine month period in fiscal year 2014, the Company recorded operating income of $102.9 million and net income of $71.0 million, or $2.34 per diluted share.

The Company also announced that for the month of June 2015, net warehouse club sales increased 11.8% to $217.2 million, from $194.3 million in June a year earlier. For the ten months ended June 30, 2015, net warehouse club sales increased 10.9% to $2,261.0 million, from $2,039.0 million for the ten months ended June 30, 2014. There were 37 warehouse clubs in operation at the end of June 2015 and 33 warehouse clubs in operation at the end of June 2014.

For the four weeks ended June 28, 2015, comparable warehouse sales for the 32 warehouse clubs open at least 13 1/2 full months increased 4.0%, compared to the same four-week period last year. For the forty-three week period ended June 28, 2015, comparable warehouse sales increased 2.6%, compared to the comparable forty-three week period a year ago.

The Company also announced that on June 25, 2015, the Company successfully opened its warehouse club in Costa Verde, Panama, bringing to 37 the total number of warehouse clubs in operation by the Company. This warehouse club is the Company's fifth warehouse club in Panama.

PriceSmart management will host a conference call at 12:00 p.m. Eastern time (9:00a.m. Pacific time) on Friday, July 10, 2015, to discuss the financial results. Individuals interested in participating in the conference call may do so by dialing (888) 312-9849 toll free, or (719) 457-1517 for international callers and entering participant code 1552252. A digital replay will be available through July 31, 2015, following the conclusion of the call by dialing (888) 203-1112 for domestic callers, or (719) 457-0820 for international callers, and entering replay passcode 1552252.

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 37 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 in El Salvador; 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, 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 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; 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; 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, and failure to adequately maintain our systems or 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 28.1% of our voting stock as of August 31, 2014, which may make it difficult to complete some corporate transactions without their support and may impede a change in control; our inability to develop and retain existing key personnel or to attract highly qualified employees could adversely impact our business, financial condition and results of operations; 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; if we do not maintain the privacy and security of confidential information, we could damage our reputation, incur substantial additional costs and become subject to litigation; 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; we face increased compliance risks associated with compliance with Section 404 of the Sarbanes-Oxley Act of 2002; and 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. In addition to the risks described above, these statements are also subject to 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, 2014 filed on October 30, 2014 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 BALANCE SHEETS  
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)  
   
    May 31, 2015 (Unaudited)     August 31, 2014  
ASSETS                
Current Assets:                
Cash and cash equivalents   $ 145,593     $ 137,098  
Short-term restricted cash     16,249       2,353  
Receivables, net of allowance for doubtful accounts of $2 and $0 as of May 31, 2015 and August 31, 2014, respectively     8,261       7,910  
Merchandise inventories     266,184       226,383  
Deferred tax assets - current     7,520       6,177  
Prepaid expenses and other current assets (includes $4,425 and $495 as of May 31, 2015 and August 31, 2014, respectively, for the fair value of derivative instruments)     31,055       17,260  
Total current assets     474,862       397,181  
Long-term restricted cash     9,489       27,013  
Property and equipment, net     442,723       426,325  
Goodwill     35,965       36,108  
Deferred tax assets - long term     7,178       11,825  
Other non-current assets (includes $3,736 and $1,095 as of May 31, 2015 and August 31, 2014, respectively, for the fair value of derivative instruments)     35,651       30,755  
Investment in unconsolidated affiliates     10,315       8,863  
Total Assets   $ 1,016,183     $ 938,070  
LIABILITIES AND EQUITY                
Current Liabilities:                
Short-term borrowings   $ -     $ -  
Accounts payable     240,426       223,559  
Accrued salaries and benefits     18,767       17,799  
Deferred membership income     21,244       17,932  
Income taxes payable     8,769       7,718  
Other accrued expenses (includes $0 and $14 as of May 31, 2015 and August 31, 2014, respectively, for the fair value of foreign currency forward contracts)     27,916       21,030  
Dividends payable     10,564       -  
Long-term debt, current portion     26,956       11,848  
Deferred tax liability - current     130       157  
Total current liabilities     354,772       300,043  
Deferred tax liability - long-term     2,458       2,290  
Long-term portion of deferred rent     6,374       5,591  
Long-term income taxes payable, net of current portion     1,406       1,918  
Long-term debt, net of current portion     74,852       79,591  
Other long-term liabilities (includes $1,497 and $0 for the fair value of derivative instruments and $389 and $372 for the defined benefit plan as of May 31, 2015 and August 31, 2014, respectively)     1,886       372  
Total liabilities     441,748       389,805  
Equity:                
Common stock, $0.0001 par value, 45,000,000 shares authorized; 30,969,402 and 30,950,701 shares issued and 30,177,979 and 30,209,917 shares outstanding (net of treasury shares) as of May 31, 2015 and August 31, 2014, respectively     3       3  
Preferred stock $0.0001 par value; 2,000,000 shares authorized; no shares issued and outstanding as of May 31, 2015 and August 31, 2014     -       -  
Additional paid-in capital     401,821       397,150  
Tax benefit from stock-based compensation     10,725       9,505  
Accumulated other comprehensive loss     (70,056 )     (49,286 )
Retained earnings     261,162       215,613  
Less: treasury stock at cost; 791,423 and 740,784 shares as of May 31, 2015 and August 31, 2014, respectively     (29,220 )     (24,720 )
Total equity     574,435       548,265  
Total Liabilities and Equity   $ 1,016,183     $ 938,070  
                 
                 
                 
PRICESMART, INC.  
CONSOLIDATED STATEMENTS OF INCOME  
(UNAUDITED--AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)  
   
  Three Months Ended
May 31,
    Nine Months Ended
May 31,
 
  2015     2014     2015     2014  
Revenues:                      
Net warehouse club sales $ 675,314     $ 597,885     $ 2,043,849     $ 1,844,746  
Export sales   9,465       6,577       24,126       19,062  
Membership income   11,189       9,552       32,202       28,301  
Other income   1,135       1,023       3,244       2,903  
Total revenues   697,103       615,037       2,103,421       1,895,012  
Operating expenses:                              
Cost of goods sold:                              
Net warehouse club   578,868       509,684       1,743,772       1,575,623  
Export   8,992       6,246       22,953       18,110  
Selling, general and administrative:                              
Warehouse club operations   60,754       53,617       179,006       158,592  
General and administrative   14,214       12,604       41,681       37,065  
Pre-opening expenses   33       1,125       3,411       1,939  
Loss/(gain) on disposal of assets   724       558       1,087       746  
Total operating expenses   663,585       583,834       1,991,910       1,792,075  
Operating income   33,518       31,203       111,511       102,937  
Other income (expense):                              
Interest income   283       202       813       576  
Interest expense   (1,615 )     (1,043 )     (4,759 )     (2,967 )
Other income (expense), net   (311 )     489       (4,602 )     1,512  
Total other income (expense)   (1,643 )     (352 )     (8,548 )     (879 )
Income before provision for income taxes and income (loss) of unconsolidated affiliates   31,875       30,851       102,963       102,058  
Provision for income taxes   (10,750 )     (9,534 )     (36,378 )     (31,035 )
Income (loss) of unconsolidated affiliates   70       3       92       7  
Net income   21,195     $ 21,320     $ 66,677       71,030  
Net income per share available for distribution:                              
Basic net income per share $ 0.70     $ 0.70     $ 2.20     $ 2.35  
Diluted net income per share $ 0.70     $ 0.70     $ 2.20     $ 2.34  
Shares used in per share computations:                              
Basic   29,883       29,784       29,834       29,733  
Diluted   29,888       29,792       29,841       29,743  
Dividends per share $ -     $ -     $ 0.70     $ 0.70  

Contact Information

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