PriceSmart
Announces First Quarter Results of Operation
For the first quarter of
fiscal year 2006, net warehouse sales increased 21% to $166.5 million, from $137.8
million in the first quarter of fiscal year 2005. Total revenue for the first
quarter was $170.0 million, compared to $141.1 million in the prior year. The Company had 23 warehouse clubs in
operation as of
The Company recorded
operating income in the quarter of $3.1 million, compared to operating income of
$2.4 million in the first quarter of the prior year. Net income from continuing operations was
$1.4 million, or $0.05 per diluted share, in the first quarter of fiscal year
2006 compared to a net loss of $803,000, or ($0.08) per diluted share, in the first
quarter of fiscal 2005.
Net income attributable to
common stockholders for the first quarter was $2.0 million, or $.08 per diluted
share. In the first quarter of fiscal
year 2005, the Company recorded a net loss of $23.2 million, or ($2.25) per diluted
share. The net loss in the prior year included
$20.6 million ($2.00 per diluted share) attributable to deemed dividends
related to the exchange of common stock for outstanding shares of Series A and
Series B preferred stock in the first quarter of fiscal 2005.
Commenting on the first quarter results, Robert E. Price,
Chairman and Interim Chief Executive Officer, said, “We are very pleased with
the improvements in sales, earnings and the Company's balance sheet. These
results are a direct reflection on the outstanding performance of PriceSmart
employees within the
About PriceSmart
PriceSmart,
headquartered in
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 had a substantial net losses in fiscal 2003, 2004 and 2005, and may
continue to incur losses in future periods; if the Company fails to comply with
covenants governing its indebtedness, the lenders may elect to accelerate the
Company’s indebtedness and foreclose on the collateral pledged to secure the
indebtedness; 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; although the Company has taken and continues to take steps
to improve significantly its internal controls, there may be material
weaknesses or significant deficiencies that the Company has not yet identified;
the Company faces significant competition; the Company faces difficulties in
the shipment of and inherent risks in the importation of merchandise to its
warehouse clubs; the Company is exposed to weather and other 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 have control over the Company's voting stock,
which will make it difficult to complete some corporate transactions without
their support and may prevent 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 costs and 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
Form 10-K filed pursuant to the Securities Exchange Act of 1934 on
November 29, 2005. 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. Certain prior
period amounts may have been reclassified to conform to the current period
presentation.
For
further information, please contact Robert E. Price, Interim Chief Executive
Officer (858) 551-2336; or John M. Heffner, Executive Vice President and
Chief Financial Officer (858) 404-8826.
PRICESMART, INC.
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
|
|
|
|
|
||
|
|
(Unaudited) |
|
|
||
|
ASSETS |
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
Cash and
cash equivalents |
$ |
24,344 |
|
$ |
30,147 |
|
Short-term
restricted cash |
|
7,399 |
|
|
7,331 |
|
Receivables,
net of allowance for doubtful accounts of $2,252 and $2,260, respectively |
|
2,464 |
|
|
1,759 |
|
Receivables from unconsolidated affiliate |
|
106 |
|
|
811 |
|
Merchandise
inventories |
|
81,157 |
|
|
65,719 |
|
Prepaid
expenses and other current assets |
|
8,627 |
|
|
8,360 |
|
Assets of
discontinued operations |
|
1,770 |
|
|
315 |
|
Total current assets |
|
125,867 |
|
|
114,442 |
|
Long-term
restricted cash |
|
792 |
|
|
1,045 |
|
Property
and equipment, net |
|
155,624 |
|
|
142,310 |
|
Goodwill |
|
31,279 |
|
|
29,600 |
|
Deferred
tax asset |
|
21,166 |
|
|
22,260 |
|
Other
assets |
|
4,458 |
|
|
4,108 |
|
Investment
in unconsolidated affiliate |
|
6,456 |
|
|
6,089 |
|
Total Assets |
$ |
345,642 |
|
$ |
319,854 |
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
Short-term
borrowings |
$ |
1,380 |
|
$ |
1,648 |
|
Accounts
payable |
|
69,825 |
|
|
57,423 |
|
Accrued
salaries and benefits |
|
4,714 |
|
|
4,513 |
|
Deferred
membership income |
|
5,215 |
|
|
4,773 |
|
Income
taxes payable |
|
2,445 |
|
|
2,271 |
|
Other
accrued expenses |
|
11,399 |
|
|
12,547 |
|
Long-term
debt, current portion |
|
5,417 |
|
|
5,417 |
|
Liabilities of discontinued operations |
|
634 |
|
|
663 |
|
Total current liabilities |
|
101,029 |
|
|
89,255 |
|
Long-term deferred tax liability |
|
903 |
|
|
958 |
|
Deferred rent |
|
1,317 |
|
|
1,427 |
|
Accrued closure costs |
|
3,403 |
|
|
3,466 |
|
Long-term debt, related party |
|
12,500 |
|
|
— |
|
Long-term debt, net of current portion |
|
20,359 |
|
|
23,915 |
|
Total liabilities |
|
139,511 |
|
|
119,021 |
|
|
|
|
|
|
|
|
Minority interest |
|
2,633 |
|
|
2,560 |
|
Commitments and contingencies |
|
— |
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity: |
|
|
|
|
|
|
Common
stock, $.0001 par value, 45,000,000 shares authorized 26,403,421 and
26,031,180 |
|
|
|
|
|
|
shares
issued and 25,968,996 and 25,596,755 shares outstanding (net of treasury
shares),
respectively |
|
3 |
|
|
3 |
|
Additional
paid-in capital |
|
343,018 |
|
|
339,644 |
|
Tax
benefit from exercise of stock options |
|
3,379 |
|
|
3,379 |
|
Notes
receivable from stockholders |
|
(29) |
|
|
(29) |
|
Accumulated
other comprehensive loss |
|
(13,911) |
|
|
(13,757) |
|
Accumulated
deficit |
|
(119,529) |
|
|
(121,534) |
|
Less:
treasury stock at cost; 434,425 shares |
|
(9,433) |
|
|
(9,433) |
|
Total stockholders’ equity |
|
203,498 |
|
|
198,273 |
|
Total Liabilities and Stockholders’ Equity |
$ |
345,642 |
|
$ |
319,854 |
PRICESMART, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED—AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
|
|
|
Three
Months Ended November 30, |
|
|
||||
|
|
|
2005 |
|
|
2004 |
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
Sales: |
|
|
|
|
|
|
|
|
|
Net warehouse club |
|
$ |
166,513 |
|
$ |
137,801 |
|
|
|
Export |
||||||||