PriceSmart Announces Second
Quarter Results of Operations
March Sales Also
Announced
For
the second quarter of fiscal year 2009, net warehouse sales increased 13.9% to
$328.2 million from $288.2 million in the second quarter of fiscal year
2008. Total revenue for the second
quarter was $334.8 million compared to $293.8 million in the prior year. The Company had 25 clubs in operation as of February
2009 and 2008.
The
Company recorded operating income in the quarter of $17.5 million, compared to
operating income of $10.7 million in the prior year. Net income was $12.7 million, or $0.43 per
diluted share, in the second quarter of fiscal 2009 compared to $9.5 million,
or $0.33 per diluted share, in the second quarter of fiscal 2008.
For
the first six months of fiscal year 2009, net warehouse club sales increased
17.5% to $626.8 million from $533.4 million in the first six months of
fiscal year 2008. Total revenues for the
first half of the fiscal year increased 17.6% to $640.0 million from $544.3
million in the same period of the prior year.
For the first six months of fiscal year 2009, the Company recorded
operating income of $32.4 million and net income of $23.4 million, or $0.80 per
diluted share. During the same six month
period in fiscal year 2008, the Company recorded operating income of $20.9 million
and net income of $16.2 million, or $0.56 per share.
Included in the
results for the second quarter and first six months of fiscal year 2008 were
pre-tax charges and income tax benefits related to the Company’s settlement of
disputes with PSC, S.A. and related entities which had the effect of reducing
reported operating income in both the second quarter and first six months of
fiscal 2008 by $3.4 million, and net income by $1.7 million, or $0.06 per
diluted share.
The Company also announced
that for the month of March 2009 net sales increased 7.0% to $100.7 million
from $94.1 million in March a year earlier.
For the seven months ended March 31, 2009, net sales increased
15.9% to $727.5 million from $627.5 million for the seven months ended
March 31, 2008. There were 25 warehouse
clubs in operation at the end of March 2009 and 2008.
For the four weeks ended March 29, 2009, comparable
warehouse sales for the warehouse clubs open at least 12 full months increased 8.5%
compared to the same four-week period last year. For the thirty-week period ended March 29,
2009, comparable warehouse sales increased 13.6% compared to the comparable thirty-week
period a year ago.
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’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 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 own nearly one-half 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 12, 2008. 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.
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
29, |
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February
28, |
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February 29, |
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2009 |
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2008 |
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2009 |
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2008 |
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Revenues: |
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Sales: |
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Net warehouse club |
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$ |
328,240 |
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$ |
288,216 |
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$ |
626,758 |
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$ |
533,405 |
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Export |
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905 |
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340 |
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1,742 |
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|
707 |
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Membership income |
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4,425 |
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3,975 |
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8,749 |
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7,717 |
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Other income |
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1,223 |
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1,313 |
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2,753 |
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2,426 |
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Total revenues |
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334,793 |
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293,844 |
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640,002 |
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544,255 |
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Operating expenses: |
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Cost of goods sold: |
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Net warehouse club |
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279,993 |
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245,333 |
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534,419 |
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453,844 |
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Export |
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861 |
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320 |
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1,661 |
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669 |
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Selling, general and administrative: |
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Warehouse club operations |
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28,544 |
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26,024 |
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55,829 |
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49,251 |
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General and administrative |
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7,812 |
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7,870 |
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15,352 |
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15,186 |
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Preopening expenses |
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99 |
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215 |
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99 |
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987 |
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Asset impairment and closure costs |
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16 |
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14 |
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264 |
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33 |
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Provision for settlement of litigation,
including changes in fair market value of put agreement |
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— |
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3,386 |
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— |
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3,386 |
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Total operating expenses |
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317,325 |
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283,162 |
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607,624 |
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523,356 |
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Operating income |
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17,468 |
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10,682 |
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32,378 |
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20,899 |
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Other income (expense): |
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Interest income |
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115 |
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|
364 |
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|
241 |
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|
774 |
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Interest expense |
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(609 |
) |
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(470 |
) |
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(1,190 |
) |
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(529 |
) |
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Other income (expense), net |
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(42 |
) |
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(37 |
) |
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(62 |
) |
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(84 |
) |
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Total other income (expense) |
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(536 |
) |
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(143 |
) |
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(1,011 |
) |
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161 |
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Income from continuing operations before
provision for income taxes, loss of unconsolidated affiliate and minority
interest |
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16,932 |
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10,539 |
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31,367 |
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21,060 |
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Provision for income taxes |
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(4,090 |
) |
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(890 |
) |
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(7,737 |
) |
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(4,605 |
) |
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Loss of unconsolidated affiliate |
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(7 |
) |
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— |
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(12 |
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— |
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Minority interest |
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(85 |
) |
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(160 |
) |
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(150 |
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(290 |
) |
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Income from continuing operations |
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12,750 |
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9,489 |
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23,468 |
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16,165 |
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Income (loss) from discontinued
operations, net of tax |
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(63 |
) |
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27 |
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(81 |
) |
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45 |
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Net income |
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$ |
12,687 |
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$ |
9,516 |
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$ |
23,387 |
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$ |
16,210 |
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Basic income per share: |
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Continuing operations |
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$ |
0.44 |
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$ |
0.33 |
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$ |
0.81 |
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$ |
0.56 |
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Discontinued operations, net of tax |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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Net income |
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$ |
0.44 |
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$ |
0.33 |
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$ |
0.81 |
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$ |
0.56 |
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Diluted income per share: |
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Continuing operations |
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$ |
0.43 |
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$ |
0.33 |
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$ |
0.80 |
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$ |
0.56 |
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Discontinued operations, net of tax |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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Net income |
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$ |
0.43 |
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$ |
0.33 |
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$ |
0.80 |
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$ |
0.56 |
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Shares used in per share computations: |
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Basic |
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28,916 |
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28,848 |
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28,888 |
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28,815 |
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Diluted |
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29,179 |
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29,233 |
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29,145 |
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29,207 |
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Dividends per share |
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$ |
0.50 |
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$ |
0.32 |
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$ |
0.50 |
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$ |
0.32 |
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PRICESMART, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED—AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
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February 28, 2009 |
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August 31, 2008 |
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ASSETS |
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Current
Assets: |
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Cash and cash equivalents |
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$ |
29,888 |
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$ |
48,121 |
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Short-term restricted cash |
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9,500 |
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536 |
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Receivables, net of allowance for
doubtful accounts of $6 and $11 in February 2009 and August 2008,
respectively |
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3,765 |
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2,455 |
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Merchandise inventories |
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120,753 |
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113,894 |
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Deferred tax asset – current |
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2,083 |
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2,179 |
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Prepaid expenses and other current
assets |
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18,931 |
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16,669 |
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Notes receivable – short term |
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2,006 |
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2,104 |
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Assets of discontinued operations |
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882 |
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1,247 |
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Total current assets |
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187,808 |
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187,205 |
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Long-term restricted cash |
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583 |
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|
673 |
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Property and equipment, net |
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217,934 |
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199,576 |
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Goodwill |
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37,902 |
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39,248 |
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Deferred tax assets – long term |
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19,984 |
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21,198 |
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Other assets |
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3,805 |
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3,512 |
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Investment in unconsolidated affiliates |
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7,610 |
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— |
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Total Assets |
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$ |
475,626 |
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$ |
451,412 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current Liabilities: |
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Short-term borrowings |
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3,659 |
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3,473 |
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Accounts payable |
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102,430 |
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96,120 |
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Accrued salaries and benefits |
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7,466 |
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|
8,271 |
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Deferred membership income |
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|
8,707 |
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|
7,764 |
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Income taxes payable |
|
|
6,055 |
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|
3,695 |
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Common stock subject to put agreement |
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— |
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|
161 |
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Other accrued expenses |
|
|
13,626 |
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|
|
11,877 |
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Dividend payable |
|
|
7,392 |
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|
4,744 |
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Long-term debt, current portion |
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3,616 |
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|
2,737 |
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Liabilities of discontinued operations |
|
|
249 |
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|
277 |
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Deferred tax liability – current |
|
|
114 |
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|
|
486 |
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Total current liabilities |
|
|
153,314 |
|
|
|
139,605 |
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Deferred tax liability – long term |
|
|
1,339 |
|
|
|
2,339 |
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Long-term portion of deferred rent |
|
|
2,695 |
|
|
|
2,412 |
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Accrued closure costs |
|
|
3,611 |
|
|
|
3,489 |
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Long-term income taxes payable, net of
current portion |
|
|
3,471 |
|
|
|
5,553 |
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Long-term debt, net of current portion |
|
|
30,101 |
|
|
|
23,028 |
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Total liabilities |
|
|
194,531 |
|
|
|
176,426 |
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Minority interest |
|
|
636 |
|
|
|
480 |
|
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Stockholders’ Equity: |
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|
|
|
|
|
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|
Common stock, 0.0001 par value,
45,000,000 shares authorized; 30,244,086 and 30,195,788 shares issued,
respectively, and 29,591,125 and 29,615,226 shares outstanding (net of
treasury shares), respectively |
|
|
3 |
|
|
|
3 |
|
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Additional paid-in capital |
|
|
375,120 |
|
|
|
373,192 |
|
|
Tax benefit from stock-based compensation |
|
|
4,420 |
|
|
|
4,563 |
|
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Accumulated other comprehensive loss |
|
|
(16,096 |
) |
|
|
(12,897 |
) |
|
Accumulated deficit |
|
|
(68,907 |
) |
|
|
(77,510 |
) |
|
Less: treasury stock at cost; 652,961
shares as of February 28, 2009 and 580,562 shares as of August 31, 2008 |
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|
(14,081 |
) |
|
|
(12,845 |
) |
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Total stockholders’ equity |
|
|
280,459 |
|
|
|
274,506 |
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Total Liabilities and Stockholders’
Equity |
|
$ |
475,626 |
|
|
$ |
451,412 |
|