PriceSmart Announces Second
Quarter Results of Operations,
March Sales and the Relocation
of a Warehouse Club
For
the second quarter of fiscal year 2010, net warehouse sales increased 9.3% to $358.9
million from $328.2 million in the second quarter of fiscal year 2009. Total revenue for the second quarter was $366.1
million compared to $334.8 million in the prior year. The Company had 26 clubs in operation as of February
2010 and 25 clubs in operation as of February 2009.
The
Company recorded operating income in the quarter of $20.4 million, compared to
operating income of $17.5 million in the prior year. Net income attributable to PriceSmart was $13.7
million, or $0.46 per diluted share, in the second quarter of fiscal 2010
compared to $12.7 million, or $0.43 per diluted share, in the second quarter of
fiscal 2009.
For
the first six months of fiscal year 2010, net warehouse club sales increased 6.5%
to $667.5 million from $626.8 million in the first six months of fiscal year
2009. Total revenues for the first half
of the fiscal year increased 6.5% to $681.5 million from $640.0 million in the
same period of the prior year. For the
first six months of fiscal year 2010, the Company recorded operating income of
$36.7 million and net income attributable to PriceSmart of $24.1 million, or $0.81
per diluted share. During the same six
month period in fiscal year 2009, the Company recorded operating income of $32.4
million and net income attributable to PriceSmart of $23.4 million, or $0.79
per share.
The Company also announced
that for the month of March 2010 net sales increased 18.6% to $119.4 million,
from $100.7 million in March a year earlier.
For the seven months ended March 31, 2010, net sales increased 8.2%
to $786.9 million from $727.5 million for the seven months ended March 31,
2009. There were 26 warehouse clubs in
operation at the end of March 2010 and 25 warehouse clubs in operation at the
end of March 2009. The Company believes
that March sales growth was positively impacted by the Easter holiday occurring
on April 4, compared to last year when it occurred on April 12.
For the four weeks ended March 28, 2010
comparable warehouse sales for the warehouse clubs open at least 12 full months
increased 12.0%, compared to the same four-week period last year. For the thirty-week period ended March 28,
2010 comparable warehouse sales increased 4.1%, compared to the comparable thirty-week period a year ago.
PriceSmart also announced the relocation of one
of its three warehouse clubs in Panama City, Panama (the Los Pueblos Club) to
the recently completed new warehouse club at a nearby site, opening on April 9,
2010. The Company will continue to
operate four warehouse clubs 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’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 may
encounter difficulties in the shipment of and risks inherent in the 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)
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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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February 28, |
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February 28, |
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2010 |
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2009 |
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2010 |
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2009 |
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Revenues: |
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|
|
|
|
|
|
|
|
|
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|
Net
warehouse club sales |
|
$ |
358,893 |
|
|
$ |
328,240 |
|
|
$ |
667,545 |
|
|
$ |
626,758 |
|
|
Export
sales |
|
|
1,006 |
|
|
|
905 |
|
|
|
1,593 |
|
|
|
1,742 |
|
|
Membership
income |
|
|
4,827 |
|
|
|
4,425 |
|
|
|
9,476 |
|
|
|
8,749 |
|
|
Other
income |
|
|
1,396 |
|
|
|
1,223 |
|
|
|
2,926 |
|
|
|
2,753 |
|
|
Total revenues |
|
|
366,122 |
|
|
|
334,793 |
|
|
|
681,540 |
|
|
|
640,002 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
goods sold: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
warehouse club |
|
|
304,867 |
|
|
|
279,993 |
|
|
|
566,584 |
|
|
|
534,419 |
|
|
Export |
|
|
935 |
|
|
|
861 |
|
|
|
1,489 |
|
|
|
1,661 |
|
|
Selling,
general and administrative: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warehouse
club operations |
|
|
31,041 |
|
|
|
28,544 |
|
|
|
60,274 |
|
|
|
55,829 |
|
|
General
and administrative |
|
|
8,667 |
|
|
|
7,812 |
|
|
|
16,235 |
|
|
|
15,352 |
|
|
Pre-opening
expenses |
|
|
175 |
|
|
|
99 |
|
|
|
286 |
|
|
|
99 |
|
|
Asset
impairment and closure costs |
|
|
— |
|
|
|
16 |
|
|
|
— |
|
|
|
264 |
|
|
Total
operating expenses |
|
|
345,685 |
|
|
|
317,325 |
|
|
|
644,868 |
|
|
|
607,624 |
|
|
Operating income |
|
|
20,437 |
|
|
|
17,468 |
|
|
|
36,672 |
|
|
|
32,378 |
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income |
|
|
122 |
|
|
|
115 |
|
|
|
338 |
|
|
|
241 |
|
|
Interest
expense |
|
|
(634 |
) |
|
|
(609 |
) |
|
|
(1,264 |
) |
|
|
(1,190 |
) |
|
Other expense,
net |
|
|
(10 |
) |
|
|
(42 |
) |
|
|
(7 |
) |
|
|
(62 |
) |
|
Total
other expense |
|
|
(522 |
) |
|
|
(536 |
) |
|
|
(933 |
) |
|
|
(1,011 |
) |
|
Income from continuing operations before
provision for income taxes, and loss of unconsolidated affiliates |
|
|
19,915 |
|
|
|
16,932 |
|
|
|
35,739 |
|
|
|
31,367 |
|
|
Provision for income taxes |
|
|
(6,190 |
) |
|
|
(4,090 |
) |
|
|
(11,592 |
) |
|
|
(7,737 |
) |
|
Loss of unconsolidated affiliates |
|
|
(3 |
) |
|
|
(7 |
) |
|
|
(5 |
) |
|
|
(12 |
) |
|
Income from continuing operations |
|
|
13,722 |
|
|
|
12,835 |
|
|
|
24,142 |
|
|
|
23,618 |
|
|
Income (loss) from discontinued
operations, net of tax |
|
|
35 |
|
|
|
(63 |
) |
|
|
44 |
|
|
|
(81 |
) |
|
Net income |
|
|
13,757 |
|
|
|
12,772 |
|
|
|
24,186 |
|
|
|
23,537 |
|
|
Net loss attributable to noncontrolling interest |
|
|
(60 |
) |
|
|
(85 |
) |
|
|
(112 |
) |
|
|
(150 |
) |
|
Net income attributable to PriceSmart |
|
$ |
13,697 |
|
|
$ |
12,687 |
|
|
$ |
24,074 |
|
|
$ |
23,387 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to PriceSmart: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
|
13,662 |
|
|
|
12,750 |
|
|
|
24,030 |
|
|
|
23,468 |
|
|
Income (loss) from discontinued
operations, net of tax |
|
|
35 |
|
|
|
(63 |
) |
|
|
44 |
|
|
|
(81 |
) |
|
|
|
$ |
13,697 |
|
|
$ |
12,687 |
|
|
$ |
24,074 |
|
|
$ |
23,387 |
|
|
Net income per share attributable to
PriceSmart and available for distribution: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
net income per share from continuing operations |
|
$ |
0.46 |
|
|
$ |
0.43 |
|
|
$ |
0.81 |
|
|
$ |
0.80 |
|
|
Basic
net income per share from discontinued operations, net of tax |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
Basic
net income per share |
|
$ |
0.46 |
|
|
$ |
0.43 |
|
|
$ |
0.81 |
|
|
$ |
0.80 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
net income per share from continuing operations |
|
$ |
0.46 |
|
|
$ |
0.43 |
|
|
$ |
0.81 |
|
|
$ |
0.79 |
|
|
Diluted
net income per share from discontinued operations, net of tax |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
Diluted
net income per share |
|
$ |
0.46 |
|
|
$ |
0.43 |
|
|
$ |
0.81 |
|
|
$ |
0.79 |
|
|
Shares used in per share computations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
29,222 |
|
|
|
28,916 |
|
|
|
29,163 |
|
|
|
28,888 |
|
|
Diluted |
|
|
29,250 |
|
|
|
29,179 |
|
|
|
29,206 |
|
|
|
29,145 |
|
|
Dividends per share |
|
$ |
0.50 |
|
|
$ |
0.50 |
|
|
$ |
0.50 |
|
|
$ |
0.50 |
|
PRICESMART, INC.
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
|
|
|
|
N |
|
|
|
|
|
|
|
|
February 28, 2010 (Unaudited) |
|
|
August 31, 2009 |
|
||
|
ASSETS |
|
|
|
|
|
|
|
|
|
Current
Assets: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
63,047 |
|
|
$ |
44,193 |
|
|
Short-term restricted cash |
|
|
— |
|
|
|
10 |
|
|
Receivables, net of allowance for
doubtful accounts of $8 and $10 as of February 28, 2010 and August 31, 2009,
respectively |
|
|
2,454 |
|
|
|
2,187 |
|
|
Merchandise inventories |
|
|
124,077 |
|
|
|
115,841 |
|
|
Deferred tax assets – current |
|
|
2,800 |
|
|
|
2,618 |
|
|
Prepaid expenses and other current
assets |
|
|
15,982 |
|
|
|
19,033 |
|
|
Assets of discontinued operations |
|
|
820 |
|
|
|
900 |
|
|
Total current assets |
|
|
209,180 |
|
|
|
184,782 |
|
|
Long-term restricted cash |
|
|
823 |
|
|
|
732 |
|
|
Property and equipment, net |
|
|
251,398 |
|
|
|
231,798 |
|
|
Goodwill |
|
|
37,455 |
|
|
|
37,538 |
|
|
Deferred tax assets – long term |
|
|
19,168 |
|
|
|
20,938 |
|
|
Other assets |
|
|
3,982 |
|
|
|
3,927 |
|
|
Investment in unconsolidated affiliates |
|
|
8,097 |
|
|
|
7,658 |
|
|
Total Assets |
|
$ |
530,103 |
|
|
$ |
487,373 |
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
|
Short-term borrowings |
|
$ |
4,344 |
|
|
$ |
2,303 |
|
|
Accounts payable |
|
|
113,097 |
|
|
|
101,412 |
|
|
Accrued salaries and benefits |
|
|
7,878 |
|
|
|
8,831 |
|
|
Deferred membership income |
|
|
9,490 |
|
|
|
8,340 |
|
|
Income taxes payable |
|
|
5,785 |
|
|
|
5,942 |
|
|
Other accrued expenses |
|
|
8,718 |
|
|
|
10,022 |
|
|
Dividends payable |
|
|
7,429 |
|
|
|
— |
|
|
Long-term debt, current portion |
|
|
6,002 |
|
|
|
4,590 |
|
|
Deferred tax liability – current |
|
|
200 |
|
|
|
189 |
|
|
Liabilities of discontinued operations |
|
|
109 |
|
|
|
299 |
|
|
Total current liabilities |
|
|
163,052 |
|
|
|
141,928 |
|
|
Deferred tax liability – long-term |
|
|
1,091 |
|
|
|
1,026 |
|
|
Long-term portion of deferred rent |
|
|
2,902 |
|
|
|
2,673 |
|
|
Long-term income taxes payable, net of
current portion |
|
|
3,545 |
|
|
|
3,458 |
|
|
Long-term debt, net of current portion |
|
|
47,127 |
|
|
|
37,120 |
|
|
Total liabilities |
|
|
217,717 |
|
|
|
186,205 |
|
|
Equity: |
|
|
|
|
|
|
|
|
|
Common stock, $0.0001 par value,
45,000,000 shares authorized; 30,463,930 and 30,337,109 shares issued
and 29,741,523 and 29,681,031 shares outstanding (net of treasury shares) as
of February 28, 2010 and August 31, 2009, respectively |
|
|
3 |
|
|
|
3 |
|
|
Additional paid-in capital |
|
|
380,147 |
|
|
|
377,210 |
|
|
Tax benefit from stock-based
compensation |
|
|
4,724 |
|
|
|
4,547 |
|
|
Accumulated other comprehensive loss |
|
|
(17,108 |
) |
|
|
(17,230 |
) |
|
Accumulated deficit |
|
|
(40,786 |
) |
|
|
(49,998 |
) |
|
Less: treasury stock at cost; 722,407 and
656,078 shares as of February 28, 2010 and August 31, 2009, respectively. |
|
|
(15,460 |
) |
|
|
(14,134 |
) |
|
Total PriceSmart stockholders’ equity |
|
|
311,520 |
|
|
|
300,398 |
|
|
Noncontrolling interest |
|
|
866 |
|
|
|
770 |
|
|
Total equity |
|
|
312,386 |
|
|
|
301,168 |
|
|
Total Liabilities and Equity |
|
$ |
530,103 |
|
|
$ |
487,373 |
|