PriceSmart Announces Third
Quarter Results of Operations and June 2010 Sales
San
Diego, CA (July 9, 2010) – PriceSmart, Inc. (NASDAQ:
PSMT) today announced its results of operations for the third quarter of fiscal
year 2010 which ended on May 31, 2010.
For
the third quarter of fiscal year 2010, net warehouse sales increased 13.9% to $341.2
million from $299.6 million in the third quarter of fiscal year 2009. Total revenue for the third quarter was $348.6
million compared to $306.5 million in the prior year. The Company had 27 warehouse clubs in
operation as of May 2010 compared to 26 warehouse clubs in 2009.
The
Company recorded operating income in the quarter of $18.1 million, compared to
operating income of $13.2 million in the prior year. Net income was $12.0 million, or $0.40 per
diluted share, in the third quarter of fiscal 2010 compared to $8.7 million, or
$0.29 per diluted share, in the third quarter of fiscal 2009.
For
the first nine months of fiscal year 2010, net warehouse club sales increased 8.9%
to $1,008.8 million from $926.3 million in the first nine months of fiscal
year 2009. Total revenues for the first nine
months of the fiscal year increased 8.8% to $1,030.2 million from $946.5
million in the same period of the prior year.
For the first nine months of fiscal year 2010, the Company recorded
operating income of $54.7 million and net income of $36.1 million, or $1.21 per
diluted share. During the same nine
month period in fiscal year 2009, the Company recorded operating income of $45.6
million and net income of $32.1 million, or $1.08 per diluted share.
The Company also announced
that for the month of June 2010 net sales increased 19.0% to $113.9 million,
from $95.7 million in June a year earlier.
For the ten months ended June 30, 2010, net sales increased 9.8% to $1,122.6 million
from $1,022.0 million for the ten months ended June 30, 2009. There were 27 warehouse clubs in operation at
the end of June 2010 and 26 warehouse clubs in operation at the end of June
2009.
For the four weeks
ended June 27, 2010, comparable warehouse sales for the warehouse clubs open at
least 12 full months increased 14.5%, compared to the same four-week period
last year. For the forty-three week period
ended June 27, 2010, comparable warehouse sales increased 6.4%, compared to
the comparable forty-three 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 difficulties in the
shipment of and inherent risks in the acquisition and 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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Nine Months Ended |
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May 31, |
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May 31, |
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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 |
|
$ |
341,215 |
|
|
$ |
299,571 |
|
|
$ |
1,008,760 |
|
|
$ |
926,329 |
|
|
Export
sales |
|
|
868 |
|
|
|
1,038 |
|
|
|
2,461 |
|
|
|
2,779 |
|
|
Membership
income |
|
|
5,056 |
|
|
|
4,518 |
|
|
|
14,532 |
|
|
|
13,268 |
|
|
Other
income |
|
|
1,477 |
|
|
|
1,417 |
|
|
|
4,404 |
|
|
|
4,169 |
|
|
Total
revenues |
|
|
348,616 |
|
|
|
306,544 |
|
|
|
1,030,157 |
|
|
|
946,545 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
goods sold: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
warehouse club |
|
|
288,289 |
|
|
|
255,854 |
|
|
|
854,873 |
|
|
|
790,273 |
|
|
Export |
|
|
825 |
|
|
|
968 |
|
|
|
2,314 |
|
|
|
2,629 |
|
|
Selling,
general and administrative: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warehouse
club operations |
|
|
31,834 |
|
|
|
28,197 |
|
|
|
92,109 |
|
|
|
84,025 |
|
|
General
and administrative |
|
|
8,752 |
|
|
|
7,989 |
|
|
|
24,987 |
|
|
|
23,341 |
|
|
Pre-opening
expenses |
|
|
840 |
|
|
|
344 |
|
|
|
1,126 |
|
|
|
443 |
|
|
Asset
impairment and closure costs (income) |
|
|
— |
|
|
|
(48 |
) |
|
|
— |
|
|
|
216 |
|
|
Total
operating expenses |
|
|
330,540 |
|
|
|
293,304 |
|
|
|
975,409 |
|
|
|
900,927 |
|
|
Operating income |
|
|
18,076 |
|
|
|
13,240 |
|
|
|
54,748 |
|
|
|
45,618 |
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income |
|
|
122 |
|
|
|
76 |
|
|
|
460 |
|
|
|
317 |
|
|
Interest
expense |
|
|
(595 |
) |
|
|
(685 |
) |
|
|
(1,859 |
) |
|
|
(1,875 |
) |
|
Other
income (expense), net |
|
|
(240 |
) |
|
|
26 |
|
|
|
(247 |
) |
|
|
(36 |
) |
|
Total
other expense |
|
|
(713 |
) |
|
|
(583 |
) |
|
|
(1,646 |
) |
|
|
(1,594 |
) |
|
Income from continuing operations before
provision for income taxes and loss of unconsolidated affiliates |
|
|
17,363 |
|
|
|
12,657 |
|
|
|
53,102 |
|
|
|
44,024 |
|
|
Provision for income taxes |
|
|
(5,309 |
) |
|
|
(3,960 |
) |
|
|
(16,901 |
) |
|
|
(11,697 |
) |
|
Loss of unconsolidated affiliates |
|
|
(6 |
) |
|
|
(8 |
) |
|
|
(11 |
) |
|
|
(20 |
) |
|
Income from continuing operations |
|
|
12,048 |
|
|
|
8,689 |
|
|
|
36,190 |
|
|
|
32,307 |
|
|
Income (loss) from discontinued
operations, net of tax |
|
|
(4 |
) |
|
|
55 |
|
|
|
40 |
|
|
|
(27 |
) |
|
Net income |
|
|
12,044 |
|
|
|
8,744 |
|
|
|
36,230 |
|
|
|
32,280 |
|
|
Net loss attributable to noncontrolling interest |
|
|
(20 |
) |
|
|
(61 |
) |
|
|
(132 |
) |
|
|
(211 |
) |
|
Net income attributable to PriceSmart |
|
$ |
12,024 |
|
|
$ |
8,683 |
|
|
$ |
36,098 |
|
|
$ |
32,069 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to PriceSmart: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
|
12,028 |
|
|
|
8,628 |
|
|
|
36,058 |
|
|
|
32,096 |
|
|
Income (loss) from discontinued
operations, net of tax |
|
|
(4 |
) |
|
|
55 |
|
|
|
40 |
|
|
|
(27 |
) |
|
|
|
$ |
12,024 |
|
|
$ |
8,683 |
|
|
$ |
36,098 |
|
|
$ |
32,069 |
|
|
Net income per share attributable to PriceSmart and available for distribution: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
net income per share from continuing operations |
|
$ |
0.40 |
|
|
$ |
0.29 |
|
|
$ |
1.21 |
|
|
$ |
1.09 |
|
|
Basic
net income (loss) per share from discontinued operations, net of tax |
|
$ |
0.00 |
|
|
$ |
0.00 |
|
|
$ |
0.00 |
|
|
$ |
0.00 |
|
|
Basic net income per share |
|
$ |
0.40 |
|
|
$ |
0.29 |
|
|
$ |
1.21 |
|
|
$ |
1.09 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
net income per share from continuing operations |
|
$ |
0.40 |
|
|
$ |
0.29 |
|
|
$ |
1.21 |
|
|
$ |
1.08 |
|
|
Diluted
net income (loss) per share from discontinued operations, net of tax |
|
$ |
0.00 |
|
|
$ |
0.00 |
|
|
$ |
0.00 |
|
|
$ |
0.00 |
|
|
Diluted net income per share |
|
$ |
0.40 |
|
|
$ |
0.29 |
|
|
$ |
1.21 |
|
|
$ |
1.08 |
|
|
Shares used in per share computations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
29,336 |
|
|
|
29,010 |
|
|
|
29,221 |
|
|
|
28,929 |
|
|
Diluted |
|
|
29,345 |
|
|
|
29,108 |
|
|
|
29,253 |
|
|
|
29,032 |
|
|
Dividends per share |
|
$ |
0.00 |
|
|
$ |
0.00 |
|
|
$ |
0.50 |
|
|
$ |
0.50 |
|
PRICESMART, INC.
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
|
|
|
|
N |
|
|
|
|
|
|
|
|
May 31, 2010 (Unaudited) |
|
|
August 31, 2009 |
|
||
|
ASSETS |
|
|
|
|
|
|
|
|
|
Current
Assets: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
55,091 |
|
|
$ |
44,193 |
|
|
Short-term restricted cash |
|
|
1,200 |
|
|
|
10 |
|
|
Receivables, net of allowance for
doubtful accounts of $6 and $10 as of May 31, 2010 and
August 31, 2009, respectively |
|
|
2,572 |
|
|
|
2,187 |
|
|
Merchandise inventories |
|
|
133,059 |
|
|
|
115,841 |
|
|
Deferred tax assets – current |
|
|
3,219 |
|
|
|
2,618 |
|
|
Prepaid expenses and other current
assets |
|
|
18,337 |
|
|
|
19,033 |
|
|
Assets of discontinued operations |
|
|
980 |
|
|
|
900 |
|
|
Total current assets |
|
|
214,458 |
|
|
|
184,782 |
|
|
Long-term restricted cash |
|
|
5,665 |
|
|
|
732 |
|
|
Property and equipment, net |
|
|
259,619 |
|
|
|
231,798 |
|
|
Goodwill |
|
|
37,533 |
|
|
|
37,538 |
|
|
Deferred tax assets – long term |
|
|
18,019 |
|
|
|
20,938 |
|
|
Other assets |
|
|
4,195 |
|
|
|
3,927 |
|
|
Investment in unconsolidated affiliates |
|
|
8,096 |
|
|
|
7,658 |
|
|
Total Assets |
|
$ |
547,585 |
|
|
$ |
487,373 |
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
|
Short-term borrowings |
|
$ |
3,618 |
|
|
$ |
2,303 |
|
|
Accounts payable |
|
|
113,494 |
|
|
|
101,412 |
|
|
Accrued salaries and benefits |
|
|
9,637 |
|
|
|
8,831 |
|
|
Deferred membership income |
|
|
9,433 |
|
|
|
8,340 |
|
|
Income taxes payable |
|
|
6,199 |
|
|
|
5,942 |
|
|
Other accrued expenses |
|
|
11,057 |
|
|
|
10,022 |
|
|
Dividends payable |
|
|
7,429 |
|
|
|
— |
|
|
Long-term debt, current portion |
|
|
7,222 |
|
|
|
4,590 |
|
|
Deferred tax liability – current |
|
|
183 |
|
|
|
189 |
|
|
Liabilities of discontinued operations |
|
|
117 |
|
|
|
299 |
|
|
Total current liabilities |
|
|
168,389 |
|
|
|
141,928 |
|
|
Deferred tax liability – long-term |
|
|
1,088 |
|
|
|
1,026 |
|
|
Long-term portion of deferred rent |
|
|
3,005 |
|
|
|
2,673 |
|
|
Long-term income taxes payable, net of
current portion |
|
|
3,303 |
|
|
|
3,458 |
|
|
Long-term debt, net of current portion |
|
|
50,151 |
|
|
|
37,120 |
|
|
Total liabilities |
|
|
225,936 |
|
|
|
186,205 |
|
|
Equity: |
|
|
|
|
|
|
|
|
|
Common stock, $0.0001 par value,
45,000,000 shares authorized; 30,580,686 and 30,337,109 shares issued
and 29,855,630 and 29,681,031 shares outstanding (net of treasury shares) as
of May 31, 2010 and August 31, 2009, respectively. |
|
|
3 |
|
|
|
3 |
|
|
Additional paid-in capital |
|
|
378,381 |
|
|
|
377,210 |
|
|
Tax benefit from stock-based
compensation |
|
|
4,501 |
|
|
|
4,547 |
|
|
Accumulated other comprehensive loss |
|
|
(16,952 |
) |
|
|
(17,230 |
) |
|
Accumulated deficit |
|
|
(28,762 |
) |
|
|
(49,998 |
) |
|
Less: treasury stock at cost; 725,056
and 656,078 shares as of May 31, 2010 and August 31, 2009,
respectively. |
|
|
(15,522 |
) |
|
|
(14,134 |
) |
|
Total PriceSmart
stockholders’ equity |
|
|
321,649 |
|
|
|
300,398 |
|
|
Noncontrolling interest |
|
|
— |
|
|
|
770 |
|
|
Total equity |
|
|
321,649 |
|
|
|
301,168 |
|
|
Total Liabilities and Equity |
|
$ |
547,585 |
|
|
$ |
487,373 |
|