PriceSmart Announces Second Quarter
Results of Operations;
Land Acquisition for New Sites also Announced
For the second quarter of fiscal
year 2007, net warehouse club sales increased 19.6% to $226.7 million from
$189.6 million in the second quarter of fiscal year 2006. Total revenues
for the second quarter increased 20.0% to $231.9 million, compared to $193.3
million in the prior year. The Company had 23 warehouse clubs in
operation as of
The Company recorded operating
income in the second quarter of $9.6 million, compared to operating income of
$6.1 million in the second quarter of the prior year. Net income was $6.5
million, or $0.22 per diluted share, in the second quarter of fiscal 2007
compared to $3.2 million, or $0.12 per diluted share, in the second quarter of
fiscal 2006.
For the first six months of fiscal
2007, net warehouse club sales increased 19.3% to $424.8 million from
$356.1 million in the first six months of fiscal 2006. Total revenues for
the first half of the fiscal year increased 19.6% to $434.4 million from $363.2
million in the same period of the prior year. For the first six months of
fiscal 2007, the Company recorded operating income of $16.8 million, and net
income of $10.6 million, or $0.36 per diluted share. During the same six
month period in fiscal 2006, the Company recorded operating income of $9.2
million, and net income of $5.2 million, or $0.20 per diluted share.
The Company also announced that it
completed the acquisition of land in Arima, Trinidad,
and will begin construction of its previously announced third warehouse club in
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 substantial net losses in fiscal
2003, 2004 and 2005, and may not be able to sustain the profitability it
achieved in fiscal 2006 in future periods; 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
13, 2006. 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, 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)
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(Unaudited) |
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ASSETS |
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Current Assets: |
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Cash and
cash equivalents |
$ |
33,441 |
|
$ |
39,995 |
|
Short-term
restricted cash |
|
7,844 |
|
|
7,651 |
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Receivables,
net of allowance for doubtful accounts of $176 and $191, respectively |
|
4,326 |
|
|
3,599 |
|
Merchandise
inventories |
|
84,108 |
|
|
77,432 |
|
Prepaid
expenses and other current assets |
|
10,596 |
|
|
8,985 |
|
Assets of
discontinued operations |
|
1,543 |
|
|
1,594 |
|
Total current assets |
|
141,858 |
|
|
139,256 |
|
Long-term
restricted cash |
|
407 |
|
|
531 |
|
Note
receivable |
|
2,130 |
|
|
— |
|
Property
and equipment, net |
|
160,918 |
|
|
162,029 |
|
Goodwill |
|
31,702 |
|
|
31,870 |
|
Deferred
tax asset |
|
19,875 |
|
|
20,183 |
|
Other
assets |
|
3,926 |
|
|
1,903 |
|
Investment
in unconsolidated affiliate |
|
2,980 |
|
|
3,271 |
|
Total Assets |
$ |
363,796 |
|
$ |
359,043 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current Liabilities: |
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Short-term
borrowings |
$ |
4,062 |
|
$ |
158 |
|
Accounts
payable |
|
72,503 |
|
|
65,520 |
|
Accounts
payable to unconsolidated affiliate |
|
— |
|
|
381 |
|
Accrued
salaries and benefits |
|
5,448 |
|
|
5,765 |
|
Deferred
membership income |
|
6,720 |
|
|
5,780 |
|
Income
taxes payable |
|
4,217 |
|
|
4,098 |
|
Other
accrued expenses |
|
14,469 |
|
|
15,194 |
|
Dividend
payable |
|
9,458 |
|
|
— |
|
Long-term
debt, current portion |
|
1,000 |
|
|
5,417 |
|
Liabilities
of discontinued operations |
|
145 |
|
|
130 |
|
Total current liabilities |
|
118,022 |
|
|
102,443 |
|
Deferred tax liability |
|
1,307 |
|
|
1,101 |
|
Deferred rent |
|
1,708 |
|
|
1,730 |
|
Accrued closure costs |
|
3,150 |
|
|
3,226 |
|
Long-term debt, net of current portion |
|
53 |
|
|
13,252 |
|
Total liabilities |
|
124,240 |
|
|
121,752 |
|
|
|
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|
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Minority interest |
|
2,928 |
|
|
2,672 |
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Commitments and contingencies |
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Stockholders’ Equity: |
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Common
stock, $.0001 par value, 45,000,000 shares authorized; 29,552,580 and
29,404,457 |
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shares
issued and 29,076,867 and 28,966,294 shares outstanding (net of treasury
shares),
respectively |
|
3 |
|
|
3 |
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Additional
paid-in capital |
|
365,317 |
|
|
364,132 |
|
Tax
benefit from stock-based compensation |
|
3,902 |
|
|
3,509 |
|
Accumulated
other comprehensive loss |
|
(14,010) |
|
|
(13,883) |
|
Accumulated
deficit |
|
(108,517) |
|
|
(109,676) |
|
Less:
treasury stock at cost; 475,713 shares
and 438,163 shares held, respectively |
|
(10,067) |
|
|
(9,466) |
|
Total stockholders’ equity |
|
236,628 |
|
|
234,619 |
|
Total Liabilities and Stockholders’ Equity |
$ |
363,796 |
|
$ |
359,043 |
PRICESMART, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED—AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
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Three
Months Ended |
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Six Months
Ended |
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February
28, |
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February
28, |
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2007 |
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2006 |
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2007 |
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2006 |
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Revenues: |
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